UK banks lose GBP £2.4 million to IT outages as risks escalate

UK investment banks experienced significant financial losses due to major IT outages over the last year, with new research estimating a total cost of GBP £2.4 million. These incidents, reportedly lasting an average of 68 minutes each, have put a spotlight on the ongoing challenges of IT resilience within the sector.

Outage impact

The average major IT outage cost investment banks more than GBP £600,000. Investment banks recorded approximately four major customer-facing outages each in the past 12 months. Network issues accounted for 55% of the disruptions, followed by human error at 42%, and legacy systems at 27%.

Customer trust was affected, with 63% of IT leaders reporting increased complaints following outages. Financial penalties were cited by 52% as a direct consequence of these events.

Barriers to resilience

IT decision-makers identified regulatory complexity as the main obstacle to improving resilience, with 39% citing it as a barrier. Internal resistance to change was mentioned by 37%, while 28% highlighted a shortage of internal skills required to address IT challenges.

Legacy technology was also listed as a persistent issue. Bank leaders specified that outdated infrastructure continued to slow recovery times and increase vulnerability to outages.

Emerging threats

Looking forward, investment banks highlighted cyber threats as the most significant risk to IT operations, with 28% flagging this concern. AI integration presents challenges for 24% of banks, as institutions work to incorporate artificial intelligence into existing processes. Legacy systems remain a concern for 15% of respondents, indicating that technology upgrades are lagging behind digital demands.

The findings underscore the importance of operational resilience as firms move towards further digital transformation. Investment banks face increasing pressure from regulators and clients to assure continuity and reduce downtime. Surveyed IT leaders stated that swift recovery and strengthened infrastructure are priorities for maintaining client trust and competitiveness.

Investment and strategy

"As scrutiny from regulators, counterparties and clients intensifies, investment banks face growing pressure to minimise disruption and safeguard business continuity. This research underscores the need to invest in modern IT infrastructure, build internal skills and processes, and work with trusted partners to reduce risk and recover quickly fm outages. By modernising legacy systems and embedding advanced resilience strategies, firms can protect market confidence and remain competitive in an increasingly digital capital markets landscape," said Krista Griggs, Global Account Director, Capital Markets, GFT.