Key Takeaways
- Several banks in the U.K. experienced online banking disruption on Feb. 28.
- Halifax, Lloyds, TSB, First Direct, Nationwide and Bank of Scotland were affected.
- The incident was the latest in a string of outages that suggest legacy banks’ online banking systems aren’t fit for requirements.
Major British banks experienced disruption to their online services on Friday, Feb. 28, with Nationwide also reporting payment delays.
While it isn’t yet clear what is behind the technical issues, this is the second month in a row that banks have experienced outages toward the end of the month, when many people receive their salaries.
Banking Systems Crash Under Pressure
The timing of Friday’s downtime suggests banks’ online systems may have been unable to handle the increased activity on payday.
While there is no indication of problems with the U.K.’s underlying payment rails, web and mobile apps are now the most popular means for people to move money between accounts. It can therefore be very inconvenient for customers when these systems fail.
For instance, although Nationwide’s online services were up and running on Friday, the building society acknowledged that “some incoming and outgoing payments are delayed.” This suggests it was experiencing problems updating account balances.
Emerging technologies like blockchain-based settlement systems promise to solve many of the challenges faced by the banking industry. But integrating yet another payment system could also introduce friction for banks as they try to maintain their customer-facing applications.
Some banks recommended that customers who needed to make payments urgently use alternative methods.
On X, Lloyds directed people to the number for its telephone banking service.
While some customers were probably grateful for the existence of such legacy payment systems on Friday, the multi-channel tech stack operated by large banks could also be part of the problem.
Commenting on Lloyds and Halifax’s issues earlier in February, financial technology expert Chris Skinner said banks these days have “such a smorgasbord of things they have to work with” that keeping up with the pace of technology is “challenging every bank.”
Banking Outages a Recurring Problem in the U.K.
Though it wasn’t the first such incident, Friday’s outage affected many banks simultaneously. In June 2024, HSBC, Nationwide, Barclays, and Virgin Money experienced similar problems.
More recently, Lloyds and Halifax online services went down on Feb. 3. A week later, on Feb. 11, HSBC experienced another service outage.
One explanation for the simultaneous crashes could be U.K. banks’ shared infrastructure. For instance, as they sit within the same group, Halifax, Lloyds and Bank of Scotland share many core systems.
Yet, newer banks that were built to be digital from the ground up don’t face the same challenges.
Downtime Less Likely Among Digital Banks
In contrast to the incumbents, the U.K.’s digital-first banks, including Monzo, Revolut and Starling, have an almost spotless record of near-continuous uptime.
When Monzo did experience a problem with its cloud system in 2024, the firm’s backup infrastructure kicked in straight away, restoring service within an hour.
The U.K.’s banking system is one of the most technologically advanced in the world. However, some of its institutions have been around for hundreds of years, and they built their online banking applications on top of older systems.
Unlike pure digital banks, traditional banks must simultaneously maintain multiple layers of infrastructure spanning cloud environments and old-school mainframes.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
