NewsCOMMENT: Regulators’ Deadline On UK Banks’ IT outages

COMMENT: Regulators’ Deadline On UK Banks’ IT outages

In July, a string of outages, and in particular the TSB IT meltdown, left thousands of consumers locked out of their bank accounts, or bereft of their hard earned pensions.

In answer, the Bank of England issued the deadline of the 5th October for UK banks to come up with a plan to solve the issue for UK consumers.

The recurring issue of IT outages involves millions of customers and has drawn the attention of top financial regulators and politicians such as Nicky Morgan.

The issue hasn’t been solved and banks are being asked to show how they will improve their response (notably their response time) to these never ending outages. Will this deadline by regulators help solve this issue?

CAST, the Software Intelligence company, is helping banks such as ING and Credit Suisse have reliable and resilient software.

Its recent research on Application Software Security shows banks have the weakest software and coding practices leaving the sector most at risk of an IT failure or cyber attack.

programmer focused on code

Lev Lesokhin, EVP Strategy & Analytics at Cast, comments on this deadline by regulators saying:

Today marks the deadline for comment on the 5th October set by regulators at the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England on the operational resilience of UK banks.

It is too little too late. This has been a lingering issue for years in the UK and the regulators’ approach falls way short of what the UK banking industry needs to stay competitive.

Setting tolerance levels on the impact of service disruptions and assuming disruptions will happen is fine but does nothing to tightening the controls on systems robustness to prevent the increasing number of outages UK banking customers are suffering.

As proven by data many times over, robustness of the software is a significant root cause of outage.

At CAST, we have developed the world’s largest software intelligence database. We publish studies in engineering and industry journals every year and according to our research, UK banks score 5.3% lower than US in terms of robustness, which is fully 18.5% lower than their soon-to-be head to head competitors in continental Europe.

Without addressing root cause, the UK regulators are missing an opportunity to set standards for the banking industry they dominate.

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