Barclays has confirmed it will pay up to £12.5 million in compensation to customers affected by IT failures over the past two years. According to GB News, the bank expects to distribute between £5 million and £7.5 million for a major system outage in January 2025, which left many unable to access accounts or make payments. An additional £5 million is allocated for compensation related to previous disruptions dating back to January 2023.
The Treasury Committee, which is investigating banking IT failures, revealed that at least 158 outages have occurred across nine UK banks and building societies in the last two years. Barclays stated that its January outage was due to a software malfunction in its mainframe operating system and was not linked to a cyber attack.
The Impact of Barclays’ Banking Outages
The most significant disruption happened in late January 2025, coinciding with payday for many customers and the self-assessment tax return deadline. More than half of all attempted online payments failed, leaving individuals unable to process transactions. Some customers reported financial losses, late fees, and considerable inconvenience due to the prolonged downtime.
Barclays UK Chief Executive Vim Maru acknowledged the frustration and distress caused by the disruptions:
“We acknowledge that through no fault of their own, some of our customers and clients may have suffered loss, distress, and inconvenience.”
Treasury Committee Investigation Into Banking IT Failures
The Treasury Committee’s investigation has exposed serious concerns over the resilience of banking technology. The inquiry found that over 33 days’ worth of unplanned outages had occurred across major UK banks and building societies since 2023.
MP Dame Meg Hillier, chairwoman of the committee, stated:
“The fact that there have been enough outages to fill a whole month within the last two years shows customers’ frustrations are completely valid.”
She also urged banks to ensure they are properly compensating affected customers and improving their response times during outages.
How Affected Customers Can Claim Compensation
Barclays has confirmed that eligible customers will be contacted directly regarding compensation. Those affected do not need to apply manually, as the bank will assess claims based on account activity and disruptions experienced during outages.
With digital banking becoming the primary financial service for millions, these failures highlight the growing risks of system reliance and the importance of banks investing in stronger IT infrastructure to prevent future incidents.
