On 13 March 2020, the House of Commons’ Treasury Committee published the Government and UK regulators’ (the PRA, FCA and Bank of England) responses to its reports on IT failures in the financial services sector and on economic crime.
The Committee’s report made the following conclusions:
- the current level of financial services IT failures is unacceptable;
- the UK regulators must act to improve operational resilience of the UK’s financial services sector;
- financial sector levies should increase so the UK regulators can hire experienced staff;
- the UK regulators must use enforcement powers to ensure failures do not go unpunished;
- there is a strong case for the concentrated cloud services sector to be regulated; and
- firms must resolve customer complaints and award compensation quickly.
Commenting on the responses from the Government and the UK regulators, the Rt Hon. Mel Stride MP, Chair of the Treasury Committee, said:
“The harm caused to consumers from IT failures in the financial services sector is unacceptable. The previous Committee sought to get to the bottom of what’s causing these failures and how consumers can be better protected.
The Committee urged regulators to take action to improve the operational resilience of firms in the financial services sector. It recommended that regulators should increase financial sector levies if greater resources are required, ensure individuals and firms are held to account for their role in IT failures, and ensure that firms resolve customer complaints and award compensation quickly.
HM Treasury has rightly recognised that operational resilience of the financial services sector and the protection of consumers are key priorities. It is considering some of the recommendations made in the Committee’s report.
The regulators’ response echoed that of the Government, noting that they will take forward the Committee’s recommendations as they develop and implement changes to regulation to ensure adequate operational resilience.
The Committee will follow up on these responses as part of our regular scrutiny sessions with HM Treasury and the regulators to ensure that all required actions are being taken to protect consumers.”