GFT: UK Banks Face Consumer Distrust Over IT Resilience
Digital transformation consultancy GFT has revealed that UK banking customers are losing confidence in financial institutions' ability to maintain reliable digital services, with one in four consumers now keeping physical cash reserves specifically to protect against banking outages. An additional 11% plan to start doing so.
These concerns appear well-founded. In the past year, 17% of UK banking customers experienced IT failures, with disruptions lasting an average of six hours.
During these outages, customers lost access to basic banking services, including the ability to make payments or access their funds. The research shows that most outages (25%) lasted between 1-2 hours, while another 25% persisted for 3-6 hours.
Security and Third-Party Risk
The survey highlighted specific concerns about third-party technology providers, with 38% of respondents worried about their role in causing bank IT failures.
This follows a major outage at cybersecurity firm CrowdStrike in July 2024 that affected 8.5 million Microsoft Windows devices globally, causing widespread disruption across multiple sectors including financial services.
The UK financial services industry faced another significant disruption when an issue at Clearing House Automated Payment System (CHAPS) on 18th July 2024 delayed high-value payments for thousands of customers using the system.
Consumer watchdog Which? found that UK banks face IT failures serious enough to stop customers from making payments at least once a day.
Consumer research indicates that 42% of banking customers fear cyberattacks could lead to personal data theft during system outages. This concern increases with age, rising from 33% among 18-24-year-olds to 46% among those over 55.
The research revealed a persistent trust gap between traditional and digital-only banks, with 32% of respondents saying they trust traditional banks more than digital banks to protect their money from technical failures.
“These findings reveal a clear disconnect between the rapid digitalisation of banking services and consumer confidence around the security and resilience of these measures"
The Future of Cash Access
Despite the push towards digital banking, cash usage remains resilient, with UK adults using physical currency an average of nine times per month. More than half (54%) of consumers express concern about the prospect of a cashless society.
The availability of cash withdrawal facilities remains a priority for consumers, with 20% worried about declining ATM numbers. Nearly a quarter (24%) believe the government should mandate minimum ATM provision in urban areas.
Both Sweden and Norway are reconsidering their plans for cashless societies due to concerns that fully digital payment systems could expose them to security threats and exclude some individuals from participating in the economy.
Norway's Directorate for Civil Protection has recommended that the public maintain an emergency store of cash despite the country having one of the lowest numbers of ATMs per capita.
In response, the Financial Conduct Authority has introduced requirements for banks to evaluate whether communities have adequate access to essential financial services, including cash facilities. Local communities can now request formal assessments of banking service availability.
Regulatory Response
The European Union's Digital Operational Resilience Act (DORA), which takes effect in January 2025, will require financial institutions to implement comprehensive IT risk management practices and incident reporting procedures.
In alignment with DORA, UK regulators including the Financial Conduct Authority and Bank of England have received enhanced powers to oversee critical third-party providers whose failures could threaten financial stability.
The UK's Payment Systems Regulator has also implemented new guidelines requiring banks to refund fraud victims up to £85,000 within five days, placing greater responsibility on financial institutions to prevent fraud.
Richard Kalas, Client Solutions Director, Retail Banking at GFT UK, says: “These findings reveal a clear disconnect between the rapid digitalisation of banking services and consumer confidence around the security and resilience of these measures.
“While digital banking offers numerous benefits, it's essential that banks continue to clearly demonstrate the various measures they are taking to ensure all critical customer services are resilient.”
GFT's Industry Recognition
The findings come as GFT received two 2024 Geography and Global AWS Partner Awards at AWS re:Invent 2024.
The digital transformation consultancy was named ‘Innovation Partner of the Year, Global’ for its innovative consulting and professional services, and ‘Industry Partner of the Year - Financial Services, EMEA’ for its work helping financial institutions accelerate cloud innovation.
The awards recognised GFT's work with Romanian Salt Bank and Brazilian bank Itaú.
GFT Co-CEO Marco Santos says: “GFT's recognition by AWS affirms our expertise in reshaping industries through innovation. These accolades also reflect our tech leadership and our deep dedication empowering our clients to thrive in a new era of digital growth.”
Priya Lakshmi, Chief Revenue Officer, UK at GFT adds: “Our customers and partners appreciate the deep financial services engineering expertise we bring, which helps us deliver cutting-edge innovations for them.
“Being recognised as the AWS EMEA Partner of the Year for Financial Services is a testament to this outstanding work as the UK continues to be a global powerhouse of forward-thinking firms across Financial Services.”
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