Banks: Internet Banking

Lord Flight Excerpts

Monday 1st February 2016 Lords Chamber

[Lord Ashton of Hyde]

Of course, the point of setting up the regulatory system is that it is for the regulators to deal with consumer detriment, which is exactly what the Financial Conduct Authority has done. I believe that the banks involved in this have said that they would not allow consumers to suffer detriment.

[Lord Flight (Con)]

My Lords, does the Minister recognise that part of the problem is that the long-standing banks have computer systems that go back a long way and which are often very difficult to modernise? They cannot suddenly turn off the whole of their system for a fortnight and put in a brand new one, so existing systems keep getting added to until the scope for mistake and failure if anything gets greater.

[Lord Ashton of Hyde]

I accept that old IT systems are more difficult to modernise than starting from scratch. That is why many challenger banks are now in the pipeline, ready to compete with the older banks. The Government support challenger banks and encourage customers who wish to change their banks to do so, and 2.1 million customers have done so under the CASS system.