Barclays, the United Kingdom’s second-largest bank, may be required to compensate customers up to £12.5 million (approximately $16 billion) due to technological outages experienced over the past two years. This information came to light following a letter sent by the bank to Members of Parliament (MPs), in response to data published by the Treasury Committee. The data highlighted that nine of the UK’s largest banks and building societies collectively endured 33 days of unplanned technological and system outages during this period. 
The Treasury Committee, a cross-party group, initiated inquiries with the chief executives of these banks to ascertain the extent of the IT failures and the estimated compensation for affected customers. This investigation was prompted by a significant Barclays outage in January 2025, which caused days of disruption for customers. Notably, this incident coincided with payday and the self-assessment tax return deadline, exacerbating the inconvenience for many. During this period, Barclays reported that over half of online payment attempts failed, underscoring the severity of the disruption.
In a letter published by the Treasury Committee, Barclays UK CEO Vim Maru acknowledged the impact on customers, stating: “We acknowledge that through no fault of their own, some of our customers and clients may have suffered loss or distress and inconvenience.” The bank anticipates paying between £5 million (approximately $6.4 million) and £7.5 million (approximately $9.5 million) in compensation for the latest outage. Additionally, Barclays estimates a further £5 million in compensation for other incidents that occurred between January 2023 and December 2024.
Barclays clarified that the January outage resulted from a software issue within a segment of its UK mainframe operating system and was not due to a cyberattack. This distinction is crucial, as it highlights internal technological challenges rather than external threats.
The broader industry context reveals that, across nine banks and building societies, there were at least 158 IT failure incidents between January 2023 and February 2025. This figure does not include Barclays’ recent outage or other recent disruptions to banks’ online services. Commonly cited causes for these incidents include issues with third-party suppliers, disruptions from system changes, and internal software malfunctions.
What Barclays said about this compensation
The frequency and impact of these outages have raised concerns among regulators and customers alike. Financial institutions are under increasing pressure to ensure the reliability and resilience of their digital services, especially as more customers rely on online banking for daily transactions. The potential £12.5 million compensation by Barclays serves as a stark reminder of the financial and reputational risks associated with technological failures in the banking sector.
In response to these challenges, banks are expected to invest more heavily in upgrading their IT infrastructure and implementing robust contingency plans. Ensuring seamless digital experiences for customers is no longer a competitive advantage but a fundamental expectation. As digital banking becomes increasingly integral to consumers’ lives, the resilience of these systems remains a critical focus for both financial institutions and regulators.
The Treasury Committee’s ongoing scrutiny emphasizes the need for transparency and accountability in addressing these issues. Banks must not only rectify technological shortcomings but also communicate effectively with customers about the causes of disruptions and the steps being taken to prevent future occurrences. This approach is essential to maintaining trust in the financial system and ensuring customer satisfaction.
As the banking industry continues to evolve with technological advancements, the balance between innovation and operational stability becomes increasingly delicate. Financial institutions must navigate this landscape carefully, prioritizing both the adoption of new technologies and the reliability of existing systems. The recent challenges faced by Barclays and other banks serve as a pivotal learning opportunity, underscoring the importance of robust IT infrastructure in delivering uninterrupted services to customers.
In conclusion, Barclays’ potential £12.5 million compensation to customers highlights the critical need for resilient technological systems in the banking sector. As digital banking becomes more prevalent, ensuring the reliability of these platforms is paramount. Financial institutions must proactively address internal vulnerabilities, collaborate with third-party suppliers to mitigate risks, and maintain transparent communication with customers to uphold trust and confidence in their services.
