UK Treasury Committee Opens Inquiry Into Financial Sector IT Failures

The UK Treasury Committee is investigating the causes and consequences behind IT outages at banks and financial firms. The Committee has launched an official inquiry to find out why IT failures continue and what the consequences are. The inquiry comes amid a period of increased discussion around IT and cyber risk and resilience, following several widely publicised incidents, most notably the crash of TSB banking software during a botched IT migration in April. The crash resulted from TSB’s attempt to upgrade systems for its 1.9 million active online and mobile customers, which failed, leaving hundreds of thousands unable to access their accounts. The bank tried to switch 5 million customers and 1.3 billion records to software run by its Spain-based parent Sabadell from a system operated by Lloyds Banking Group, which sold TSB three years ago. The inquiry follows a discussion paper on the subject published by the FCA, as well as a resilience test conducted by the Bank of England. It will tackle an aspect of IT risk, which has previously received limited attention – namely, how consumers suffer as a result of IT failures.