Technology disasters at banks and finance firms have more than doubled amid an unprecedented wave of cybercrime, the City watchdog has warned.
Overconfident bankers are making errors in crucial computer updates which cause chaos, the Financial Conduct Authority says.
And many firms are woefully underprepared for hacking attacks – putting their customers at risk.
Overconfident bankers are making errors in crucial computer updates which cause chaos, the Financial Conduct Authority says (stock image)
British lenders have suffered a wave of online failures and hacks over the past few years, from a blackout at TSB to a massive internet raid at Tesco Bank.
Megan Butler, of the FCA, said there had been a 138 per cent rise in technology failures at finance firms during the year to October.
This includes both hacking cases and problems of the firms’ own making. The number of cyber-attacks rose 18 per cent. She added: ‘The FCA is deeply concerned that the number of technology incidents reported to us has increased. If your bank stops working, your life and business can be severely constrained – a point that is especially true in the UK today with the decline in use of physical currency.’
FCA supervision director Miss Butler, speaking at an industry meeting in central London, believes many raids still go unreported – so the true picture might be even worse.
She said: ‘All the trends we’re seeing at the moment suggest an increasing threat to UK customers, and financial markets, from technology outages and cyber-attacks.’
The regulator highlighted the huge failure earlier this year at TSB, which saw 1.9million customers locked out of their bank accounts, triggering a massive wave of fraud.
Other lenders to have suffered brief outages in the past few months include Barclays and NatWest owner Royal Bank of Scotland. Visa’s payments system also went down across Europe for several hours in June.
FCA supervision director Miss Butler, speaking at an industry meeting in central London, believes many raids still go unreported – so the true picture might be even worse (stock image)
Miss Butler added: ‘We are worried that a lot of firms seem overly confident about their ability to manage flagship IT change programmes and keep systems up to date. This overconfidence bias does seem to be particularly characteristic in financial services.’
Another key failure singled out by Miss Butler happened at Tesco Bank in 2016, when hackers made fraudulent payments from hundreds of accounts. She said: ‘They had specific warning of the threat and failed to put in place an effective defence, which left their customers in a vulnerable position for a significant period of time.’
Miss Butler warned there has been a sharp rise in hacks on firms – with as many as four million attacks launched from one cybercrime website alone.
It came as Paul Gillen, head of Barclays’ cyber security team, warned that the lender was fighting off attacks every day.