UK investment banks have lost £2.4 million in major IT failures over the past 12 months, with network problems, human error and outdated systems being the main causes.
The latest survey by financial services consultancy GFT Censuswide also found that the average IT system outage lasts more than an hour and costs an investment bank £600,000. More than 200 IT executives from UK investment banks took part in the survey.
Krista Griggs, global accounts director, capital markets at GFT, said: “As regulatory, counterparty and client scrutiny increases, investment banks face increasing pressure to minimize disruption and ensure business continuity.”
Financial penalties from regulators and lost customers add to the overall cost of IT downtime. However, the GFT study found that there are barriers that prevent investment banks from making their IT infrastructure more reliable. The report found that 39% of IT decision makers surveyed said regulatory complexity was a barrier to sustainability, while 37% cited internal resistance to change and 28% cited internal skills shortages.
Looking to the future, IT decision makers surveyed said cyber threats, artificial intelligence integration challenges and legacy systems will be potential leading causes of disruption.
In the broader banking sector, the cost of these problems is enormous. The data comes from nine of the UK's largest banks. members of the Treasury Committee identified at least 158 bank IT outages between January 2023 and February 2025, representing more than 800 hours of service downtime.
Barclays reported the most incidents (33) in the period and said it could pay out up to £12.5 million in downtime compensation over two years.
Allied Irish Bank, HSBC and Santander each had 32 incidents, while Nationwide Building Society reported 18 outages, NatWest 13 and Lloyds Bank 12. NatWest reported the most downtime at 194 hours, followed by HSBC at 176 hours. Banks told MPs that systems and internal software failures were common causes of IT failures.
But it's not always internal failures that cause disruption: financial services companies today rely heavily on IT companies, especially large cloud providers. A recent IT issue at Amazon Web Services (AWS) resulted in a 14-hour outage on October 20th. It originated in the public cloud giant's US-East-1 data center region in Northern Virginia and caused widespread disruption to scores of companies around the world, including British financial giant Lloyds Banking Group.
The UK's Financial Conduct Authority has warned it would like to tighten its controls on third-party providers to the wider sector, such as AWS.
According to a message in GuardianSarah Pritchard, deputy director-general of the FCA, asked whether the regulator was concerned that companies such as Amazon are not designated as important third-party providers to the financial sector, meaning they escape regulatory oversight, said: “We would like to see the system strengthened. And we are prepared to provide oversight in conjunction with the PRA.” [Prudential Regulation Authority] and the Bank of England, when such designation exists.”
