HSBC’s recent service outage on February 11, 2025, highlights the challenges traditional banks face in maintaining stable and reliable digital banking platforms, according to GlobalData. The disruption, which prevented customers from accessing online and mobile banking services, left many unable to make payments, check balances, or transfer funds.
HSBC did not name its technology partners. Stuart Riley is the group Chief Information Officer of HSBC.
Despite HSBC’s substantial investment in information and communications technology (ICT), with its budget estimated at over $10 billion in 2023, the efficiency and reliability of its digital services remain questionable.
This incident comes amid concerns over the fragility of legacy banking infrastructure, particularly as digital-only challengers continue to set new standards for reliability and customer experience, Jonathan Vaughan Burleigh, Associate Analyst, Banking and Payments at GlobalData, said.
The outage at HSBC follows a pattern of similar disruptions across the UK banking sector. In just over a week, Barclays, Halifax, and Lloyds have all experienced online service failures, with Barclays’ outage lasting nearly three days.
HSBC was able to resolve its issue within a day, but such incidents continue to shake banking consumers’ confidence in traditional banking institutions. The inability to perform essential financial transactions, especially during critical moments like payday, highlights the pressing need for banks to strengthen their digital infrastructure.
Barclays and Lloyds each allocated over $1 billion to ICT, yet both have struggled with service disruptions. The significant financial commitment to technological development should ideally translate into seamless digital experiences for customers, but recurring outages suggest inefficiencies in resource allocation or fundamental flaws in existing systems.
A key factor contributing to these failures is the reliance on legacy banking infrastructure, which is often outdated and difficult to modernize without significant structural changes. Unlike digital-only banks, which are built from the ground up on cloud-native platforms, traditional banks often operate on decades-old systems that have been patched and upgraded over time rather than replaced. These older infrastructures are less agile, making them more prone to disruptions and slower to recover from technical failures.
In contrast, digital-first banks like Starling have demonstrated superior performance in both customer satisfaction and digital reliability. According to GlobalData’s Competitor Benchmarking Analytics 2024, Starling ranked highest in the UK market for digital satisfaction and net promoter score (NPS), a measure of customer loyalty and likelihood to recommend a service.
Meanwhile, HSBC ranked among the lowest in both categories, with a particularly poor showing in digital satisfaction. This discrepancy underscores the competitive disadvantage faced by traditional banks when it comes to delivering seamless online experiences.
Consumer frustration over digital banking failures is growing, and this negative sentiment is likely to accelerate customer migration to more reliable alternatives. GlobalData’s 2024 Financial Services Consumer Survey found that 29 percent of users who switched banks did so based on recommendations from family and friends.
This suggests that poor digital experiences not only damage customer satisfaction but also influence consumer decisions on a broader scale. As more users prioritize convenience and reliability, traditional banks risk losing their competitive edge if they fail to modernize effectively.
The long-standing strength of legacy banks has been their established trust and deep-rooted customer relationships. However, repeated outages and unreliable digital services are eroding this trust, making customers more willing to explore alternatives.
While HSBC and other high street banks continue to invest heavily in their ICT systems, their current approach does not appear to be delivering the necessary improvements. Without a fundamental overhaul of their digital strategies, traditional banks may find themselves increasingly outpaced by digital challengers that offer more stable, efficient, and customer-friendly banking experiences.
Baburajan Kizhakedath
