by Mark McKee, 28th Feb 2025
Another end of month payday and Nationwide, First Direct, Lloyds and Halifax all confirmed they’ve had serious technology issues with their online banking systems today (Friday 28th Feb 2025), which has impacted scores of customers, as reported by The Telegraph. And this isn’t new either, due to it becoming increasingly obvious that household name banks can’t cope with the high rate of throughput as wages go in and bills come out of customer accounts. What this means is the basic function of a bank isn’t working, which should be a wake-up call for everyone in finance, whether a startup or Nationwide, which prides itself on being a mutual with lots of branches still open.
It seems pretty clear that with decades of not replacing legacy systems, and instead building new layers on top, separated by APIs (“The API will set you free,” I once heard a senior technologist from a bank that was thankfully not on this list at a tech conference a number of years ago) is taking its toll. Clearly, technology leaders and COOs are not thinking about scale and performance at peak times in these traditional banks. This will invariably drive customers to move their business elsewhere. It’s quite plausible they were already conducting performance benchmarking, but it’s probably the case that they only got in on the act when it was already too late. This is where eTrading experience really helps, as you continually soak test your system as a matter of course. This culture was not embedded in the working practices of retail banks, however, as they relied on their “robust and stable” mainframes to chug along. After all, it was easy money, right? Today it is unlikely that many more multiples of customers and transactions are overloading their systems and these outages are more often than not a function of ailing systems that are not being renewed.
We should also consider this a warning for fintech firms: even startups, but why? You get off the ground with a brand new platform, cloud hosted and shiny. You’ve got to grow fast and adapt to attract that key set of clients that will build the momentum you need to survive and then thrive. It only really takes about five or so years for all of the new features, complexity and shortcuts that have been built on top to make that once new platform a legacy system as it becomes harder and more expensive to maintain. Working on performance and architecture on an ongoing basis is an existential matter and not one that can be put aside for “when there is a quieter period next year.” Without deliberate effort and investment you risk losing all that has been so hard won.
There are, however, things you can do to proactively prevent this:
- Do load testing continuously and aim to run at least twice the number of transactions or data hops as you would expect to get at your all-time peak: cloud tech makes it easy to load this all up on a separate network and environment
- Put in measurements and be data driven so you can identify performance bottlenecks. This will help you build a backlog of what needs to be worked on so you can prioritise it
- Spend a continuous 20% of effort (minimum) on tech improvements: this is not a one-time exercise
- Ensure these tech improvements are understood by all stakeholders and show the benefits of work done, as everyone in a fintech firm needs a platform that is robust, stable and always available for clients
Your technology roadmap is your business roadmap!
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