As digital banking becomes the norm, over a third (34%) of Brits are worried about the potential of IT failures and security at their banks, and 25% now keep cash on hand as a precaution against outages.

This trend reflects the growing uncertainty consumers feel about the reliability of digital financial services, as the availability of in-person banking continues to decline.

Over the past year, one in six (17%) people have been affected by IT failures within their banks, facing an average disruption time of six hours, with customers unable to access their funds or pay for essential goods and services.

This data comes from GFT’s latest Banking Disruption Index, a bi-annual assessment of consumer sentiment towards digital banking.

The research also uncovered growing concern about the security and resiliency of third-party technology providers supporting banks, with 38% of respondents worried about the potential of these organisations to cause an IT outage at a bank, highlighting a broader scepticism around the security and reliability of outsourced digital services.

Additionally, 42% of those surveyed said they were wary of cyber-attacks, fearing that an outage could lead to personal information theft. This underscores the growing expectation for banks to protect both consumer data and access to funds.

Richard Kalas, Client Solutions Director, Retail Banking at GFT, said:

“These findings reveal a clear disconnect between the rapid digitalisation of banking services and consumer confidence around the security and resilience of these measures. While digital banking offers numerous benefits, banks must continue to clearly demonstrate the various measures they are taking to ensure all critical customer services are resilient.”

The role of banks in enhancing security

As digital banking continues to grow, so do consumer concerns about security and reliability. In response, banks are under increased pressure to strengthen their resilience strategies, ensure operational stability, and better safeguard customers.

To meet these expectations, financial institutions must continue to invest in robust IT infrastructure and cybersecurity measures, and partner with trusted organisations to effectively prevent and swiftly recover from outages.

What’s more, under recent Payment Systems Regulator (PSR) guidelines effective from 7^th October, banks must now refund fraud victims up to £85,000 within five days. By shifting a significant portion of responsibility back to banks, the regulation reinforces the importance of customer protection and proactive fraud prevention.

Digital Banking Security Tips for Consumers

Consumers can take proactive steps to safeguard their finances and navigate potential disruptions:

1. Keep Emergency Cash:
   Always have a small amount of cash on hand to cover essential expenses in case of a digital outage.
2. Enable Two-Factor Authentication (2FA):
   Strengthen account security by enabling 2FA, which requires an additional verification step beyond your password.
3. Monitor Accounts Regularly:
   Check your account activity frequently to spot unauthorized transactions early and report them to your bank.
4. Secure Your Devices:
   Use strong passwords, keep software updated, and avoid accessing banking apps over unsecured public Wi-Fi networks.
5. Set Up Alerts:
   Enable transaction alerts to receive notifications about any activity in your account, ensuring you stay informed in real-time.

By adopting these strategies and tips, both banks and consumers can work together to enhance the resilience and trustworthiness of digital banking systems.

Final Thoughts

The rise of digital banking demands a secure and resilient financial ecosystem. IT outages and cyber threats not only affect consumers but also challenge trust in the broader financial system.

Industry Collaboration:
Banks must partner with regulators, tech providers, and cybersecurity firms to create shared fraud databases and implement stronger industry standards. Regulations like the UK’s PSR guidelines are crucial in holding banks accountable and safeguarding consumers.

Global Lessons:
Countries like Sweden and the U.S. are investing in robust digital infrastructure and resilience testing, setting examples for global innovation and reliability.

Emerging Solutions:
Biometrics and blockchain are transforming security, with predictions that over 60% of banks will adopt blockchain by 2025.

Economic Impact:
Banking disruptions cause real financial stress, with 40% of affected consumers reporting significant challenges.

To maintain trust, banks must invest in secure systems, collaborate across the industry, and prioritize customer protection.