- Barclays plans to compensate customers with £5 million to £7.5 million after a significant IT outage disrupted services from January 31 to February 2, 2025.
- Approximately 5% of customers faced login issues, while 56% of those who logged in experienced problems with making payments.
What happened: Barclays faces backlash over IT outage
Barclays has announced plans to pay out between £5 million and £7.5 million in compensation to customers affected by a significant IT outage earlier this year. The incident occurred from 31 January to 2 February 2025, when a software problem in a critical module of the UK mainframe operating system caused issues for users attempting to access the mobile app and online banking.
Approximately 5% of customers faced login failures, while 56% of those who managed to log in experienced difficulties when making payments. This outage highlights the vulnerabilities in the bank’s digital infrastructure, which supports essential services like debit cards and overdrafts, impacting millions of digitally active users.
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Why this is important
The implications of Barclays‘ IT outage extend beyond the immediate financial compensation. With over 13 million digitally active customers in the UK, the bank recognises the distress caused to users through no fault of their own. Such outages raise critical concerns about the reliability of banking technology, especially as more customers rely on digital platforms for their financial transactions.
The issue reflects broader trends in the financial industry, where tech failures have become increasingly frequent. The UK Treasury Committee reported that banks have accumulated over 803 hours of unplanned outages in the past two years, raising alarm bells among regulators and customers alike.
This trend indicates a growing need for banks to invest in robust IT systems and contingency plans. As digital banking continues to evolve, customers expect seamless experiences and minimal disruptions. The impact of these outages can lead to a loss of trust in financial institutions, prompting customers to reconsider their banking choices.
Moreover, as financial technology advances, the pressure on banks to maintain reliable services increases. This story serves as a crucial reminder of the importance of operational resilience in an increasingly digital world, where failures can have widespread consequences for consumers and the industry as a whole.
