- 89% of Brits lose trust in companies following an IT failure
- Half (51%) of UK adults would consider switching banks following an IT issue
- 43% feel their money is unsafe with a bank which has experienced IT failures
NEW RESEARCH has revealed the wider impact IT failures can have on business stakeholders when faced with technical issues.
Research carried out by IT support provider Probrand.co.uk, revealed that 89% of UK adults would lose trust in a company following an IT failure or technical issue.
The research of 1,009 UK adults found that 1 in 2 (51%) UK adults would consider switching banks following issues with their IT systems.
In recent years the banking sector has experienced more frequent IT failures and technology issues, with the Financial Conduct Authority reporting a 300% year on year increase (2018/19) in technical failures at financial firms.
When asked about their motives for changing banking provider, 43% of respondents said they felt that their money was unsafe with a bank which had experienced IT issues.
41% feared technical issues would happen again whilst 39% were worried that their personal data may be at risk.
In addition to the above, research also revealed that banking IT failures can have a detrimental effect on an individual customer’s credit score, as 64% of those who checked their credit report following a technical fault uncovered errors on their records.
Research found that six of the UK’s largest banks experienced at least one IT failure every two weeks, with Barclays being identified as the worst offender.
Matt Royle, marketing director at Probrand comments: “Our research demonstrates that even the biggest banks, where security investments are top of agenda, can and will be compromised, but that the impact on brand perception and therefore business are real.
“For smaller businesses it is critical to invest in digital security to ensure that software is regularly updated, internet threats are kept at bay and employees are trained to adopt a ‘zero trust’ mentality, particularly when it comes to email.
“Often companies don’t realise their IT systems and infrastructure have been penetrated and their business-critical data compromised, or they discover it too late. At which point, for many, it is a disaster recovery scenario, where businesses are simply looking to recover to an operational position with minimal disruption.
“Naturally, short term ICO fines can be applied for data loss, but it is the long term damage to brand perception and trust that our survey emphasises must be taken into consideration when prioritising investment in security services and solutions. It really is a case of when, not if, you will be hit.”
The top five reputational impacts of IT failures
- Loss of customer trust – Technical faults will deter new customers to bank with them existing customers are likely to consider switching to a ‘more secure’ competitor.
- Loss of market share – A financial business which is unable to manage their IT infrastructure will lose clients, investors and even shareholders, as stakeholders lose confidence in their products and services.
- Loss of data – This can be anything from customer payment details and direct debits to sales data and entire databases, depending on the severity and nature of the fault. A loss of data can result in loss of customers, fines imposed and in some cases compensation may need to be paid out to customers. It was reported that TSB made huge losses following an IT meltdown in 2018. The computer issues faced caused them to lose 80,000 customers switching to other banking providers compared to 30,000 in 2017.
- Financial loss – the failure of IT systems can incur a huge amount of costs financially. In addition to the cost of rectification and data retrieval by a technical team, there would be an interruption of normal services; there may also be fines imposed by regulators. The Royal Bank of Scotland were fined £56 million following an IT meltdown in 2012 which caused them to lose customer payments and direct debits. Following the IT meltdown RBS were forced to cut staff bonuses, redress their own customers and compensate customers of other banks who were also affected.
- Unproductive downtime – system failures are not limited to the external customer , they can often result in downtime internally resulting in payments stopping and staff being unable to work efficiently if at all; the end result of this is a loss of productivity and output.