The recent power outages in Spain and Portugal harkened back to the multiple online banking system failures which hit some of the most prominent UK banks in early March 2025.
Customers at Lloyds, TSB and Bank of Scotland experienced significant down periods when accessing their bank accounts, most notable on days when they were getting paid.
Michael Hanson, VP of Banking, Financial Services and Insurance at Quantum Metric, spoke to Payment Expert on why bank outages have been so prevalent 2025 and what more banks can do to mitigate this risk through more efficient communication and updated banking infrastructure.
Hanson also highlights the role AI can play moving forward in being able to streamline chatbots to assist with customer concerns and why banks should prioritise these methods to maintain long-term customer loyalty.
Payment Expert: What has been your reaction to the increasing number of online banking outages occurring over recent months?
Michael Hanson: Any type of technology outage can be frustrating, but outages that occur with something as impactful as personal finances can cause extreme anxiety!
In a digital-first world, access to banking services is paramount and when disruptions occur, it creates unnecessary financial stress. What’s concerning is that these outages are becoming more and more common, affecting tens of millions of customers.
While banks have made significant strides in digital innovation, the pressure on IT infrastructure and employees has never been greater. But when it comes to customers’ personal finance, there is no room for missed quality standards and the industry must focus on strengthening system resilience and ensuring that digital experiences keep pace with evolving customer expectations.
PE: Can you outline the impact these IT outages can have on customer trust and loyalty?
MH: Trust is the keystone of any financial services relationship. When outages occur, especially on high-stakes days like payday or bill deadlines, the impact extends beyond inconvenience. Missed payments or overdraft fees could cause real financial stress, damaging consumer trust and their loyalty.
Reputational damage spreads quickly, with social media amplifying customer dissatisfaction in real time. A single outage can drive customers to seek alternatives, particularly when communication is unclear or slow. Banks must prioritise not just system resilience but also proactive, transparent communication to maintain trust and long-term loyalty.
PE: Do you feel these outages raise further questions around banks often relying too much on legacy systems, and if not, do they need to make further developments?
MH: The recent outages highlight the risks associated with legacy systems or workflows. While these have served banks for years, they cannot keep pace with the digital demands of today’s customers.
Moving to cloud-based systems, along with a proactive, agile approach, offers greater stability, resilience and flexibility, which are essential in preventing disruptions or lessening their impact.
Financial institutions should continue to modernise their IT infrastructure and workflows to meet the evolving needs of digital banking and ensure seamless, reliable customer experiences across all digital channels whether mobile, web, kiosk, in-branch or even ATM’s and ITM’s while taking a proactive and communicative approach to ensuring that their consumer trust is not affected
PE: How essential, moving forward, is it for financial institutions to produce clear and timely communications to customers when it pertains to IT faults/outages in order to maintain customer relationships?
MH: Clear, timely, communication is non-negotiable and expected during IT outages. In moments of disruption, customers need reassurance, especially when managing tasks like paying bills or accessing funds. Silence causes frustration and erodes trust. Even worse, non-responsive live chat agents or extraordinarily long call wait times exacerbate the situation.
To maintain strong relationships, financial institutions must provide real-time updates, estimated resolution times and transparent explanations of what’s being done, whether via proactive text, email, chat, messaging or social communication. The same communications should also be available to live chat agents or customer care agents.
Proactive communication not only reduces customer anxiety but also demonstrates accountability and care. In a digital-first world where trust is fragile, how banks respond in these moments defines their customers long-term loyalty.
PE: Does AI hold the answers to how financial institutions can mitigate these IT system faults and provide greater insight on detecting developing issues before they escalate?
MH: Definitely. AI can play a pivotal role in detecting potential issues before they escalate. By analysing front and back-end data in real-time, AI-enabled systems can identify patterns and anomalies that signal developing problems. This proactive approach can help financial institutions prevent outages and minimise downtime, ensuring customer trust and improving service reliability.
AI also allows for rapid detection of fraud and enhances customer support, further driving confidence in digital services. For example, if there was a slowness in API’s while trying to transfer money to a friend for last night’s dinner – a firm that is leveraging AI would be able to detect the slowness in real-time before a consumer begins rage-clicking and provide a chat message stating “Hi Mary – thank you for being a customer. We noticed you’re trying to transfer money right now but we have a system slowdown. Would you like us to let you know when we’re back up or would you prefer to chat with a banker to finalize your transaction?”.
This is a real-world example that innovative, early-adopter firms of AI are able to provide to their customers!
PE: Is there potential for banks and financial institutions to introduce offline capabilities for its digital-facing platforms and if so, are there current use cases?
MH: Yes, there’s significant potential for offline capabilities to enhance resilience during outages. Some banks are already exploring offline features like transaction history access or basic payment functionalities to ensure customers aren’t completely disconnected during disruptions.
For instance, customers could make essential payments or check balances without internet access. This is an important step in ensuring continuous service and mitigating customer frustration, particularly when customers are managing time-sensitive financial tasks. This is a similar workflow to how email or cloud providers allow you to work “offline” and then when you’re re-connected finalise sending your emails, etc.
