Barclays to Pay £7.5 Million in Compensation After Major Banking Outage

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Barclays Bank is set to pay up to £7.5 million in compensation to customers following a three-day IT outage that left thousands unable to access their accounts.

The incident, which occurred between January 31 and February 2, 2025, saw significant disruptions to online and mobile banking services, affecting millions of transactions during a critical financial period.

Impact on Customers

The timing of the outage was particularly troublesome, coinciding with payday for many employees and the self-assessment tax return deadline. Reports indicate that as many as 56% of attempted online payments failed during this period, leaving customers unable to complete essential transactions, pay bills, or access funds.

In response, Barclays has pledged to compensate affected customers, with total payouts expected to reach £7.5 million. The bank has advised impacted individuals to reach out with documented evidence of financial loss or inconvenience to claim their compensation.

Recurring IT Failures Across the Banking Industry

This latest outage adds to growing concerns over the reliability of banking IT systems in the UK. Over the past two years, Barclays has reportedly experienced 33 IT outages, leading to nearly £5 million in previous compensation payments.

Other major banks have also faced similar issues, with HSBC and Santander UK each reporting 32 outages and Nationwide logging 18 within the same period.

The frequent failures have raised questions about the resilience of digital banking infrastructure. Customers increasingly rely on online platforms for financial transactions, and repeated disruptions undermine confidence in these systems.

Regulatory Scrutiny and Industry Response

The Financial Conduct Authority (FCA) and other regulators have expressed concerns over the frequency of banking outages and their impact on consumers. There are growing calls for stricter regulations requiring banks to enhance their IT security and system resilience to prevent future failures.

Industry experts suggest that Barclays and other financial institutions must invest heavily in upgrading their digital infrastructure.

With the rise of fintech challengers offering more reliable and innovative banking solutions, traditional banks risk losing customer trust and market share if they do not improve their technological capabilities.

What Customers Should Do

Customers affected by the outage are encouraged to contact Barclays to claim compensation. Those who believe they have not received adequate redress can escalate their complaints to the Financial Ombudsman Service for further review.

As digital banking continues to dominate the financial landscape, ensuring the stability and security of IT systems has never been more crucial. Barclays’ latest payout serves as a stark reminder of the cost of system failures—both financially and reputationally—for banks across the UK.

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