Barclays Banking App Outage Compensation: What You Need to Know (2025 Update)

Learn about Barclays banking app outage compensation, expected payouts, and how you might be affected. Understand the reasons behind the outages and what steps are being taken to prevent future disruptions. Get the latest updates on Barclays compensation.

Summary: Barclays is set to issue millions in compensation to customers affected by recent IT outages, with estimates ranging from £5m to £12.5m. The outages, primarily caused by mainframe system degradation, disrupted online payments and banking services, coinciding with critical financial periods. This situation has triggered investigations into the resilience of UK banking IT infrastructure, highlighting the broader issue of frequent digital banking failures.

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Barclays Banking App Outage Compensation: Understanding the Impact and Payouts

In recent months, Barclays customers have faced significant disruptions due to IT outages, leading to widespread frustration and financial inconvenience.The scale of these outages has prompted Barclays to commit to substantial compensation payouts, marking one of the largest settlements in the UK banking sector in recent years.

This article delves into the details of the Barclays banking app outage compensation, exploring the reasons behind the disruptions, the expected compensation amounts, and the broader implications for banking customers.

The Scope of the Barclays Outages

The recent outages experienced by Barclays customers were not isolated incidents. They represent a broader trend of IT failures affecting major UK banks. The core issue for Barclays stemmed from a “severe degradation” in the performance of their mainframe computer, a critical component for processing bulk data and online transactions.

Details of the Outages:

Timeline: The primary disruption occurred at the end of January, lasting several days.
Impact: 56% of Barclays’ online payments failed during the peak of the outage.
Cause: A software problem with the mainframe system, not a cyber-attack.
Affected Periods: Data includes outages from January 2023 to February 2025.

These outages coincided with crucial financial periods, including payday and the self-assessment tax return deadline, exacerbating the impact on customers

Expected Barclays Compensation: Millions in Payouts

Barclays has acknowledged the severity of the disruptions and committed to compensating affected customers. The expected compensation amounts are significant, reflecting the scale of the impact.

Compensation Figures:

Initial Estimate: Barclays expects to pay between £5m and £7.5m for “inconvenience or distress” caused by the January outage.
Total Potential Payout: When considering all outages over the past two years, the potential compensation could reach £12.5m.
Comparison: This would be the largest compensation payout by a UK bank in the last two years, significantly surpassing the £350,000 paid by the Bank of Ireland.

It is important to note that some customers will receive automated refunds, while others may be contacted by Barclays for additional information.

Table: Comparison of Compensation Paid by Major UK Banks

Bank	Compensation Paid (GBP)
Barclays	Up to £12,500,000
Bank of Ireland	£350,000
NatWest	£348,000
HSBC	£232,697
Lloyds	£160,000
Nationwide	£77,452
Santander	£17,000
AIB	£590

The Impact on Customers: Beyond Financial Loss

The Barclays outages have had a profound impact on customers, extending beyond financial losses. For many, the disruption caused significant stress and anxiety, particularly during critical financial periods.

Real-Life Impact:

Delayed House Moves: Emily McAllister and her family were forced to spend nights in a hotel and with relatives due to a delayed house move caused by the outage.
Financial Strain: Customers faced difficulties paying bills, salaries, and managing essential expenses.
Increased Fraud Risk: Barclays anticipates higher instances of fraud as a result of the outage, with some individuals attempting to exploit the situation.

“For families and individuals living pay cheque to pay cheque, losing access to banking services on payday can be a terrifying experience,” said Dame Meg Hillier, the committee’s chair.

Investigating the Root Causes: Why Do These Outages Keep Happening?

The Treasury Committee has been investigating the recurring IT problems plaguing UK banks. Their findings reveal a systemic issue requiring urgent attention.

Key Findings:

Frequent Outages: Nine major banks and building societies reported 803 hours of unplanned outages over the past two years, equivalent to 33 days.
Common Causes: Problems with third-party suppliers, system changes, and internal software malfunctions.
Legacy Infrastructure: Experts highlight the need for banks to invest in modernizing their aging IT infrastructure.

The committee’s investigations aim to hold banks accountable and drive improvements in IT resilience.

Common reasons for IT failures.

Third-party suppliers: Issues caused by the services or software provided by outside companies.
System changes: Problems that arise during or after updates or modifications to banking systems.
Internal software malfunctions: Errors or bugs within the bank’s own software.

Barclays Response and Remediation Efforts

Barclays has acknowledged the issues and outlined its efforts to address the problems and prevent future outages.

Barclays’ Actions:

Software Fix: A software fix from the mainframe provider is undergoing comprehensive testing.
Customer Support: Barclays is working to identify and contact all affected customers.
Fraud Prevention: Enhanced measures are being implemented to mitigate the risk of fraud.
“We continue to work through the impact to ensure no customer or client will be out of pocket as a result of the incident.” Vim Maru, the chief executive of Barclays UK.

Barclays told BBC News it was “deeply sorry to customers who have been impacted by any service outage”.

The Broader Implications: Banking IT Resilience

The Barclays outages have highlighted the vulnerability of the UK’s banking IT infrastructure. Experts and regulators are calling for greater investment in modernization and improved oversight.

Key Considerations:

Regulatory Scrutiny: The Treasury and financial authorities are working to regulate third-party suppliers and ensure banks provide adequate service.
Customer Trust: Frequent outages erode customer trust and confidence in digital banking services.
Digital Transformation: Banks need to accelerate their digital transformation efforts to build more resilient and reliable systems.

Patrick Burgess of BCS, the Chartered Institute for IT, says the findings “once again highlights that the traditional banking sector hasn’t kept pace with the investment needed to modernise its infrastructure”.

What Customers Should Do

If you were affected by the Barclays outages, here are some steps you can take:

Monitor Your Accounts: Keep a close eye on your bank statements and transactions.
Contact Barclays: If you experienced financial losses or distress, contact Barclays customer service.
Report Fraud: If you suspect any fraudulent activity, report it to Barclays immediately.
Keep records: Keep any records of late fees, or other expenses caused by the outage.

FAQs: Barclays Banking App Outage Compensation

Q: How much compensation is Barclays expected to pay?

A: Barclays is expected to pay between £5m and £7.5m for the January outage, with potential payouts reaching £12.5m when considering all outages over the past two years.

Q: What caused the Barclays outages?

A: The outages were caused by a “severe degradation” in the performance of Barclays’ mainframe computer, due to a software problem.

Q: How will I receive compensation?

A: Some customers will receive automated refunds, while others may be contacted by Barclays for additional information.

Q: What steps is Barclays taking to prevent future outages?

A: Barclays is testing a software fix from its mainframe provider and working to improve its IT infrastructure.

Q: What should I do if I was affected by the outage?

A: Monitor your accounts, contact Barclays customer service if you experienced losses, and report any suspected fraud.

Q: Are other banks having similar problems?

A: Yes, the Treasury Committee has found that major UK banks experienced 803 hours of unplanned outages over the past two years.

Q: Will I automatically receive compensation?

A: Some customers will, others will be contacted. Therefore, it is important to monitor your account.

Q: What is the treasury commitee doing?

A: They are investigating the impact of banking IT failures, and requesting data from banks, to improve the stability of the system.

Q: Is there an increase in fraud due to these outages?

A: Yes, Barclays has stated that they have seen increased fraud attempts, and expect more to be reported.

Q: When was the main outage?

A: The main outage was at the end of January of 2024

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