Lloyds Bank outage just the latest of a recurring trend as complexity grows

Lloyds Bank customers were unable to access online banking services yesterday in what appears to have been an IT problem.

The problems were said to be limited to customers of Lloyds Bank with Halifax and Bank of Scotland customers not affected.

When I see a 24 hour outage, like this one was reported to be, I think of it as being small. Of course it’s not it is just that there have been many recently some of which have been over extended periods.

Lloyds Bank customers were advised to use the mobile app or branches if the wanted to do things like pay bills, view statements and set up standing orders. The fact that the mobile app continued to work does at least show the value of multiple channels.

I have tried several times to get through to the Lloyds Baking Group press office to get an update, but without any luck. But the causes of outages could be one of many and, although I think they should, the banks rarely tell you the exact cause was. Unless of course you are Monzo which gave a detailed explanation of why services were unavailable during a 30 minute period back in 2017, which was refreshing.

Monzo is a challenger bank, which takes me onto my next point. Because of the complex nature of the legacy IT systems being used by the big banks they have more IT outages than challenger banks. A recent survey from IT company Five Degrees revealed that 38% of customers at traditional banks experience disruption to their service every year compared to 21% of challenger bank customers.

TSB for example had a major outage when it migrated customers to a new core banking platform form the systems of Lloyds Banking Group who hosted them from the time the companies were merged.

Paul Pester, CEO at TSB, had to step down after the botched migration of customers to a new banking platform. The meltdown cost TSB £300m, not including the loss of customer confidence.

Could these constant outages become a thing of the past? Lloyds Banking Group is actually planning to move off these legacy systems move 500,000 customer accounts from its legacy IT onto a cloud-based core banking platform from fintech Thought Machine. A platform with the promise of reliability on the level of Google.