Banks ‘investing heavily’ in digital platforms as payday glitch chaos strikes again
The banking sector is “investing heavily” in digital platforms, according to the body which represents the country’s lenders as many face a backlash over the latest payday glitch chaos to hit customers.
Millions were exposed on Friday to varying challenges from slow app or online banking performance to being blocked out of their accounts altogether.
Users said the brands caught up in the issues – which did not appear to be the result of a single problem – included Lloyds, Halifax, Nationwide, TSB, Bank of Scotland and First Direct.
It marked the second month in a row for payday problems and no reasons have been given for them.
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The industry has been historically reluctant to talk about the common challenges but its mouthpiece, UK Finance, told Sky News there was help available and protections in place during times of disruption while acknowledging customer frustrations.
The body spoke up as MPs and regulators take a greater interest in the resilience issue due to mounting concerns over the number of glitches.
All this comes at a time when major lenders face criticism for continuing to cut branch services at a regular pace – blaming ever higher demand for online services.
The UK’s big banking brands have been shutting branches since the fallout from the financial crisis in 2008, which sparked a rush to cut costs.
The uptake of digital banking services has seen more than 6,200 sites go to the wall since 2015, according to the consumer group Which?
The latest closures were revealed last month by Lloyds – Britain’s biggest mortgage lender.
Lloyds revealed in January that it was cutting a further 130+ branches from its network of brands. Pic: Reuters
Its announcements meant that it planned, across the group, to have just 386 Lloyds-branded branches left, with Halifax down to 281.
Bank of Scotland would have just 90 once the closure programme was completed.
Critics have long accused the industry of failing to sufficiently invest their branch closure savings in better online services.
But a UK Finance spokesperson said: “All banks invest heavily in their systems and technology to ensure customers have easy access to banking services.
“Where issues arise, they work extremely hard to rectify them quickly and to support their customers.
“Banks have been posting information on their websites and social media accounts to ensure they keep customers updated.”
Are banks doing enough?
Earlier this month, The Treasury committee of MPs wrote to bank bosses to request information on the scale and impact of IT failures over the past two years.
Their responses should have been received by Wednesday.
The letters followed an outage at Barclays which led to some customers being unable to access some services for up to three days from Friday 31 January.
The day marked HMRC’s self-assessment deadline alongside pay day.
The Bank of England has also been taking a greater interest in the issue for financial stability reasons.
The MPs sought data from the banks on the volumes of customers affected by glitches – and the compensation that had been offered.
Committee chair, Dame Meg Hillier, said then: “When a bank’s IT system goes down, it can be a real problem for our constituents who were relying on accessing certain services so they can buy food or pay bills.
“For it to happen at a major bank such as Barclays at such a crucial time of year is either bad luck or bad planning. Either way, it’s important to learn what has happened and what will be done about it.
“The rapidly declining number of high street bank branches makes the impact of IT outages even more painful; that’s why I’ve decided to write to some of our biggest banks and building societies.”
Burberry, the UK’s only global luxury brand, is to cut around 1,700 jobs worldwide over the next two years after reporting a steep financial loss.
The company lost £66m in pre-tax profit in the year ended in March as luxury goods sales fell across the world and the company weathered an “uncertain” environment and a “difficult macroeconomic backdrop”.
A year earlier, it recorded £383m in profit.
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It’s suffered in recent years with the share price falling to such an extent the business was removed from the FTSE 100, the index of most valuable companies listed on the London Stock Exchange.
Despite the financial performance, the company was upbeat, with chief executive Joshua Schulman saying “I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time”.
What cuts are being made?
The retailer did not specify any shop closures – in the past year, it closed 26 and also opened 26 stores – but did highlight shift cuts and consolidations.
“We don’t have a store closing programme, per see,” Mr Schulman told investors
The night shift at Burberry’s Castleford factory will be cut, it proposed, saying the shift has resulted in overproduction.
“Significant” investment in the facility will be made, however, as the ambition is to scale up British production “over time”, Mr Schulman said.
Changes to the retail network across the world will be made with shop staff being scheduled around “peak traffic”.
Burberry will be “realigning” shop staff, he said, “so that we can offer the best service” at the busiest times.
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There will also be a “simplification” of Burberry’s regional structure and a “rebalancing” of central and regional responsibilities to reduce duplication and “accelerate decision making” through the retail network.
But the majority of changes will be made to “office space teams” around the world, the CEO said.
Commercial and creative teams have already been consolidated, Burberry’s annual results said.
What’s gone wrong?
Aside from the global slowdown in luxury goods sales over recession fears, additional headwinds have come in the form of President Trump’s tariffs.
“Clearly, the external environment has become more challenging since mid-February”, Mr Schulman told investors.
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Tariff risks were higher than first planned, the annual results said.
It led the US market to be described by Mr Schulman as “choppy” since February when Mr Trump began announcing tariffs on Mexico, Canada and China, as well as on goods such as steel and cars.
Sales also fell in the Asia Pacific region by 16%, the results showed.
Criticism was levelled at the 2021 British government decision to withdraw VAT refunds for overseas visitors, “which has made the UK the least competitive destination in Europe for tourist shopping”, the results read.
“Business in our UK home market continues to be seriously impacted” by the move.
The chairman of the UK’s biggest water company has apologised to customers but defended staff bonus payments.
Sir Adrian Montague, of Thames Water, told MPs on the Environment, Food and Rural Affairs select committee that the utility firm, which supplies 16 million customers in London and parts of south England, was sorry.
He said: “We know the supply interruptions cause inconvenience and sometimes real hardship, and so I think the right thing to do is to start the discussion of the [company’s] turnaround plan by acknowledging we haven’t always served our customers as well as we should, and through the committee, apologising to them.”
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Thames Water’s chairman Sir Adrian Montague appears before the Environment, Food and Rural Affairs select committee. Pic: PA/House of Commons/UK Parliament
Customers faced significant service disruption in recent years, including a boil water notice in Bramley, near Guildford, last summer and a 40% rise in sewage spills in 2024.
It’s also struggled to raise investment, repay its debt pile, which now stands at £19bn after an emergency loan prevented it from running out of money and entering state control.
Despite the massive debt pile, Sir Adrian defended paying bonuses, saying the company was in “a competitive marketplace” and “we have to keep staff”.
“It’s true that this business, like many businesses, needs to reward its staff effectively”, he told committee members. “We do need to reward [staff] competitively.”
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Thames Water boss can ‘save’ company
If bonuses were not paid, “people will come knocking, they’ll try to pick out of us the best staff we’ve got”, Sir Adrian added.
“But the amounts of bonuses paid to staff is very small compared with the capital cost of the works that we were considering,” he said.
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Thames Water’s chief executive Chris Weston appears before the select committee. Pic: PA/House of Commons/UK Parliament
In the first three months of his tenure, which began in January 2024, Thames Water’s chief executive Chris Weston accepted a bonus of £195,000 as part of his £2.3m pay package.
His bonus can be up to 156% of his salary as a bonus, while frontline workers can only earn between 3% and 6%, he said.
When approached by Sky News on Tuesday, Mr Weston said he was sorry for the service that the customers received and “it’s not where we would like it to be, everyone is very committed in terms of trying and sorting it out”.
Customer bills are to rise 35% to about £588 annually per household by 2030, a figure which Thames Water is seeking to increase.
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