TSB’s IT meltdown was still with us this week, with some customers still unable to access their accounts or make payments.
Around 1.9 million mobile and online banking customers were affected by a failure in the migration of data to a new IT system. This was a major task, but something that banks and other large organisations should all have experience in handling.
But as the TSB crisis shows, even big experienced banks can run into IT problems. What can you do if it happens to yours?
The effect of the crisis
TSB’s IT meltdown has left personal and business customers locked out of their bank accounts. There have been reports of mortgage accounts vanishing, small businesses being unable to pay staff and debit cards ceasing to work. It will mean a big compensation bill for TSB, while for customers it will mean temporary hardship and possibly permanent loss.
To ensure that you can keep your finances in working order if your bank suffers a similar breakdown you need to prepare a banking disaster kit now. Here’s what you need in it:
- An alternative bank account
The TSB customers suffering the most are those who rely on TSB for all their banking services. As we’ve seen, bank IT problem can take weeks to fix. Having an instantly accessible account with a different bank can help tide you over.
Many of the IT threats to the big banks are the result of their legacy systems, which are staggering under the demand for new online services. It might be worth looking at one of the new challenger banks, which were set up around digital services, and may be able to deal with problems much faster than the large institutions.
- Funds with branch access
We are all so used to doing all our banking online that we never go into branches anymore. This is, of course, one of the reasons why banks are shutting branches as fast as they can (the other being to save money). However, if things go wrong online, having no branch nearby can make things even more difficult. Being able to speak to someone is invaluable, and could help you get your hands on cash with old-fashioned manual banking. An instant access building society account might be worth considering.
- A credit card
A credit card from an issuer other than your bank can be a valuable fall back in an emergency to keep your financial affairs afloat. Use it sparingly, to pay online bills that your bank can’t deal with and pay it off when the bank is up and running again. As long as this is within a billing month, it should not cost you anything. Best of all, get one with a 0% introductory deal.
A prepaid cash card might be another option. Having a loaded card is safer than having cash lying around, and if your bank has an emergency that drags on, it means you still have access to money.
- Automated payments
Even if everyday and online banking go down, direct debits and standing orders may keep working, as they tend to be on different platforms. If you have regular payments automated it can help avoid disruption.
All round financial security
Of course, a banking meltdown is not the only potential threat to your finances. For all round financial security, you need expert advice. At Continuum, we would be happy to help.