Confidence in banking eroded by Bank of Ireland ‘glitches’, says consumer advocate

People’s confidence in Ireland’s banking system and the technology on which it relies has been shaken by technical issues that saw many of Bank of Ireland’s systems shut down on Tuesday, a leading consumer advocate has said.

Reassurances that the infrastructure is fit for purpose is needed in light of the as yet unexplained technical glitch, which affected the bank’s phone app, said policy adviser with the Consumer Association of Ireland Dermott Jewell.

It is the second time in less than two months that Bank of Ireland has suffered a significant outage and while it was resolved by the lender by Wednesday morning, trust in the bank and other financial institutions has been eroded, Mr Jewell told The Irish Times.

“This is the second outage in recent weeks and any outage in today’s world can hurt people,” he said. “If bills are not paid or funds are not available that can damage people’s reputation and can cause them no end of difficulties and grief if they need to access their money.”

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“We have fewer banks now and it is not a good structure to have to rely upon. When something goes wrong you don’t get adequate or clear detail as to what happened,” he said.

In the aftermath of the technical issues, the Central Bank of Ireland stressed that “where issues occur which impact on customers, we expect banks to rectify the issues urgently” adding that it requires banks “to put things right where they have made errors or cause customer harm”.

It said it had engaged with Bank of Ireland to establish a full account of the incident and added that it expected the process to “include understanding the root cause of the recent service disruption and what Bank of Ireland is doing to avoid further disruption for its customers. We are monitoring the situation and will continue detailed supervisory engagement”.

The Central Bank said it expects “all firms to have adequate systems and controls in place to ensure operational resilience, and where issues that impact customers arise they should be addressed and rectified urgently”.

Mr Jewell said the amounts being spent on technology by Irish financial institutions “should be returning a system in which you can have trust and there’s no question right now that there are concerns in relation to trust”.

“We are reliant on technology and you’re frowned upon if you go into a bank. You need to take half a day off because the queues are so long because there is only one person behind the counter. All banks have created this but it’s working inefficiently on too many occasions.”

He said banks would have to provide “an alternative so if on any occasion a system goes down an alternative system kicks in within minutes that turns them back on. They’ve got to have a backup plan and outline how it works and be clear and transparent. I’m not saying I want to know exactly what happened because it might be highly confidential but there needs to be an explanation of how this happened and more importantly how it won’t happen again.”

Brendan Burgess of the askaboutmoney.com website also expressed concern about the technical outage and the ramifications it might have in the future.

“You need a good banking system and I would have assumed Bank of Ireland’s systems were good but that’s two big outages they’ve had recently,” he noted.

He said that with so much dependence on technology people would be well advised to have backup plans themselves no matter who they bank with. “Everybody should have an alternative and have cards with two different institutions I think that’s probably the only thing that you can actually do to protect yourself now.”