A third of Brits have been hit by banking technical failures, with almost 1 in 3 likely to change banks as a result

A new survey delving into technical failures within the financial services industry, and consumer attitudes towards them, has revealed a third of Brits have been affected by a technology glitch or failure within the banking sector in the past year. Indeed, in recent months, four leading banks were forced to apologise to customers after reports of issues with digital banking services, on a day when many were due to receive their wages.

This OnePoll survey of 1000 UK adults, commissioned by Roq, also found that 30% are either very likely or fairly likely to leave their bank as a result of a technology glitch.

“In an industry where governance, regulation and security are the critical foundations of success, these statistics are a real cause for concern, compounded by regular news reports of failures such as the one experienced last week,” said Paul Darby, Delivery Lead at Roq. “Digital innovation is completely evolving the sector, not least to meet with consumer demands. However, there are growing numbers of technical challenges that could seriously undermine the success of this industry-wide transformation.

“And with consumers now expecting nothing short of perfection when it comes to their online banking experiences, banks and financial institutions must respond with urgency. Failing to do so risks them losing market share to competitors who have identified a robust approach to delivering and maintaining their banking solutions, deploying Quality Engineering methodologies that help to ensure appropriate levels of due diligence. Those that have understood their client needs and thus appropriately tested their solutions, will retain loyalty with their clients and avoid damaging circumstances such as those recently seen.” 

Generational differences

The survey also found variations between the generations, with the youngest respondents most affected by a technical glitch. 19% of 18-24 year olds and 17% of 25-34 year olds admitted to being hit by a technical failure in the past three months compared to just 3% of 55-64 year olds and 4% of 65 and overs. Three-quarters of 55-64 year olds and the same number for the 65 and over age group stated they’d not been affected at all.

“This spike in technical failures impacting the younger generation could be down to them being more likely to choose digital-first banks, while the older age groups are more likely to use traditional banks." Where the bulk of business is facilitated through digital solutions for a digital-first- bank, it stands to reason that poor implementation approaches and a lack of Quality Engineering of digital solutions will have an impact on a huge percentage of their client base, " explains Paul Darby, Delivery Lead at Roq. But, as increasing numbers of heritage, bricks and mortar banks and financial institutions adopt a digital approach, it’s vital that adequate forethought and implementation of appropriate processes, procedures and client understanding is embedded as early as possible in the solution life cycle.  This is the crux of Quality Engineering: understand what ‘good’ needs to look like and create an environment that is enabled to achieve and measure against that target. 

Worryingly, the same two younger age groups were most likely to switch banks if they were affected by a technology failure, with 57% of 25-34 year olds and 47% of 18-24 year olds admitting they were either very likely or fairly likely to leave the bank. This is compared to the older generation, who are seemingly more likely to sit on the fence, with 48% of both 45-54 year olds and 65 and overs stating they are neither likely nor unlikely to leave their bank.

“It’s clear that customer expectations are high when it comes to digital experiences, especially amongst the digitally-savvy and evidently more unforgiving younger generation. Banks and financial institutions cannot rest on their laurels; they must ensure they have robust systems and risk mitigation procedures in place to avoid technical failures that could push their customers to competitors,” added Paul Darby.

North-South divide

When looking at the regional differences, London residents have been most affected by technical failures in their banking services in the past year, with 59% admitting to being hit by a glitch. This is compared to the least affected place, the North East, with 70% of residents stating they hadn’t been affected.

Similarly, London residents would be most likely to leave their bank if they suffered a technical failure, with 58% stating they were either very likely or fairly likely to switch, compared to just 17% in the South East and 17% in Wales.

Paul concluded: “Technology within the financial services sector is a fundamental part of its evolution. However, glitches and failures are becoming more commonplace placing institutions and their customers in vulnerable situations. Quality Engineering is a fundamental element of ensuring this risk is managed effectively. The ability to fully understand the quality position of solutions being built, alongside the understanding that the solution genuinely meets the needs of the client should not be downplayed. This level of clarity can save banks huge monetary impact due to costs that occur from reacting to a poor understanding of readiness and the downstream loss of trust from clients or bad press. Quality Engineering, done well, will set a bank up for success now and into the future. It supports the provision of evidence that a bank is meeting its ‘Customer Duty’ obligations, feeds directly into compliance adherence and gives the banks the right information to manage risk effectively.  Most importantly, it looks to ensure that the client is well represented in order to ensure effective testing takes place and that solutions ultimately work, and work well."

ISO 20022: a further complication for banks

"Digital innovation is transforming the banking sector, but the growing number of technical challenges could seriously undermine this progress," says Paul Darby. With the ISO 20022 deadline rapidly approaching, banks are confronted with yet another critical transformational requirement that demands a quality-first mindset. Approaching this transition without prioritising robust Quality Engineering could result in more technology outages, which, as we've seen, can quickly erode customer confidence and loyalty.

Beyond the immediate operational impact, such failures could also lead to regulatory fines and a significant loss of brand reputation. The stakes are high; customer trust, market share, and regulatory compliance are on the line.

As the survey indicates, there's little room for error—banks that fail to deliver ISO 20022 seamlessly and on time may find themselves losing ground to competitors who do. Ensuring a seamless and reliable implementation isn't just about compliance; it's about safeguarding your position in a fiercely competitive market.

To make sure your organisation is fully prepared, we invite you to book a free ISO 20022 Readiness Assessment with our experts. Our Quality Engineering experts will review your tools, processes, and testing capabilities, identifying areas for improvement and potential risks. Gain high-level recommendations to guide your next steps. Reach out to us here to book today, or email us at ask@roq.co.uk.