Tyrie called on Andrew Bailey – the Bank of England’s deputy governor of prudential regulation - to take a “leadership role” in addressing the systems failures which have plagued customers in recent years.
“Every few months we have yet another IT failure at a major bank,” he said in a statement seen by Reuters.
“These IT blunders and weaknesses are exposing millions of people to uncertainty, disruption and sometimes distress. Businesses suffer, too. We can’t carry on like this.
“Someone — probably the head of the PRA — needs to assume a leadership role, bring together those most involved among regulators and government agencies, and ensure that there are improvements at the banks.”
Outages have become a regular occurence in recent years. HSBC customers were locked out of online accounts earlier this month, due to an unspecified outage which lasted two days.
But HSBC is far from the only major UK lender to experience problems related to outadated technology.
Bank IT systems have been built up over many decades following numerous mergers and acquisitions, making them complex and prone to failure. At the same time, upgrading and modernising systems is a lengthy and difficult process that many banks have avoided tackling in the past.
The Royal Bank of Scotlnd was fined £56 million by by the PRA, following an investigation into the 2012 systems failure, which affected customers for weeks in some cases.
But despite the Financial Conduct Authority - the Bank of England’s other regulatory body – announcing it would assess UK banks’ ageing technology in 2014, outages have continued to be a regular occurence.
Here are some of the major IT meltdowns in recent years.
June 2012 – Royal Bank of Scotland
Perhaps the most notorious and substantial system failure in recent years, this affected millions of customers at Royal Bank of Scotland, Natwest and Ulster Bank, with full services not returning for weeks in some cases.
The problems stemmed from a failed upgrade to the bank’s CA 7 batch processing system. Due to the interlinked nature of the core banking systems, the outage wreaked havoc across the various divisions of the bank, with customers of Ulster Bank worst affected.
An investigation was launched into the outage, with the Bank of England’s Prudential Regulation Authority eventually fining the bank a record £56 million in 2014.
December 2013 - Royal Bank of Scotland
The following year RBS again apologised as customers were unable to make card payments, withdraw cash, or access online and mobile banking accounts on one of the biggest shopping days of the year, Cyber Monday.
RBS CEO, Ross McEwan, said that the problems were due to a historic underinvestment in legacy technology systems, and warned that increased spending on IT would take time to improve customer service levels.
"For decades, RBS failed to invest properly in its systems. We need to put our customers' needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on," he said at the time.
Days later, the bank suffered another systems failure – this time the result of cyber attackers - after a DDos attack knocked its banking website offline.
June 2014 – Nationwide
Nationwide may have succeeded in a major overhaul of its core banking systems – replacing a legacy platform with SAP software – but the UK’s largest building society has experienced its fair share of problems in the past too.
Customers were locked out of online accounts twice in one month after planned maintenance led to outages.
October 2014 – Bank of England’s CHAPS network
But it is not just the big banks - the payments networks on which they rely have also experienced problems too. In 2014, the Bank of England’s payment system for large value transfers such as house purchases – known as CHAPS - was taken offline due a ‘technical issue’, believed to have been related to planned system maintenance carried out over the previous weekend.
An subsequent investigation carried out by Deloitte revealed that a design fault was responsible, as around 700 homebuyers were unable to complete transactions. The Deloitte report showed that the Bank failed to establish procedures for dealing with systems failures, while backup systems were not used as staff did not have confidence they would work effectively.
June 2015 - Royal Bank of Scotland
RBS hit the headlines again last year – and came under the spotlight of regulators once again - when 600,000 customer payments and direct debits went missing due an unspecified IT failure.
The Prudential Regulation Authority promised to investigate the latest outage.
August 2015 – HSBC
Last summer, a glitch in HSBC’s systems meant that 275,000 payments failed to be processed, meaning that many businesses were unable to pay staff ahead of the August bank holiday.
HSBC claimed at the time that the problems related to how it passed information to the Bacs (Bankers’ Automated Clearing Services) network, a national scheme for the processing of financial transactions within the UK.
October 2015 – Barclays
Barclays is no stranger to IT meltdowns, and in October many customers were unable to access accounts or make debit and credit card payments, with reports that problems stemmed from maintenance carried out ahead of the clocks going back at the end of British Summer Time.
January 2016 – HSBC
Just days into 2016, HSBC became the first bank to suffer a major IT outage. Millions of the bank's customers were unable to access online accounts this week, with services only now returning to normal after a two-day outage.
The bank’s chief operating officer Jack Hackett blamed a “complex technical issue” with its internal systems, though further details have not been provided.
The outage drew the ire of Treasury Select Committee chair Andrew Tyrie, following a similar occurence in mid-2015: “Barely six months after the last glitch in their underperforming IT systems, HSBC is apologising again to its customers. The frequency of these failures across the financial services sector suggests a systemic weakness in IT infrastructure. This is concerning.”