A series of service outages have impacted major British financial institutions in recent days, causing payment delays that have affected hundreds of customers.
The Lloyds and Halifax banking apps were down for hours, preventing customers from transferring funds and accessing mobile and online banking. Lloyds advised its customers not to attempt duplicate payments and assured them it would work to ensure no one suffers financial loss due to the disruptions.
The incident follows a weekend in which over 600 Barclays customers reported failed payments and incorrect account balances. Because the issues happened on a Friday, many workers were left without access to their paychecks for several days.
Hard to Keep Up
While no official reasons have been provided for the banking outages, one industry expert speculated that these issues have arisen because banks are finding it “too hard to keep up” with evolving technologies.
Financial technology expert Chris Skinner told the PA News Agency that the substantial arsenal of tech systems now essential for modern banking solutions means banks might have too much on their plate.
To compensate, many banks have turned to fintech partners for digital solutions, but this comes with its own challenges. Many tech partners prioritize innovation over reliability and have not been held to the same regulatory standards as financial institutions.
Concerns about the lack of a framework governing fintech partners came to a head after the recent failure of fintech Synapse, which resulted in million of frozen consumer funds.
A House of Cards
Skinner compared the issues at Lloyds and Barclays to the CrowdStrike outage last year. Though both Synapse and CrowdStrike are third-party firms, the CrowdStrike outage had global ramifications because the cybersecurity firm services a wide array of industries.
The UK banking outages might not have the same worldwide impact, but the rash of similar issues at disparate financial institutions is cause for concern—especially since many of the same fintech providers serve multiple banks.
