High numbers of IT failures in the banking industry are leaving millions of customers without access to their money each year, figures suggest.

Consumer groups warn that the “completely unacceptable” technical blunders are having a severe impact on customers – particularly at a time when branch and ATM closures are making it increasingly difficult to access cash.

Data from the Financial Conduct Authority (FCA) shows that a total of 265 glitches were recorded between October 2018 and September this year, shutting millions out of their accounts.

However, the FCA  made it clear that the true number of individual failures is likely to be less, as one IT problem that affects several banks or different types of accounts is counted several times over in the figures.

Looking at the data as reported, the glitches involved 133 internet banking incidents, 111 mobile banking failures and 90 telephone banking outages.

Citizens Advice Scotland’s financial health spokesman Myles Fitt said: “Leaving customers cut off from their money as a result of IT failures is completely unacceptable. We help hundreds of thousands of people a year and know that, for some of our most vulnerable clients, access to cash is vital.

“At a time when many banks are closing their High Street branches and cash machines are disappearing, consumers are having to go digital by default. This puts all the onus on apps and online services, so when there are meltdowns with those, the impact can be severe.

“Financial institutions cannot be allowed to keep shrugging their shoulders when it comes to system failures. Some banks are clearly providing a better service than others – it’s time the worst get their act together and improve their services for their hard-pressed customers.”

The figures suggest that Royal Bank of Scotland (RBS) and Santander had the highest number of problems over the year, with 18.

This was followed by Barclays (17) and Tesco Bank (16).

M&S and Starling bank had no reported IT failures.

The data comes in the wake of an access-to-cash crisis, which – as reported in our sister title The Herald on Sunday – has seen around 10 free-to-use ATMs shut down every week in Scotland in the last year.

One third of the country’s bank branches have also closed between January 2015 and August this year. 

Adam Stachura, of the charity Age Scotland, claimed the FCA data shows how important it is ways to bank and pay for goods.

He said: “Bank branches are vanishing from our streets at a rate of knots, despite them being the preferred method of banking for hundreds of thousands of people in Scotland. And the relentless push from the banks to move to a digital by default option leaves around half a million older people in Scotland behind. 

“These are people who do not use the internet, do not have digital devices and will find themselves excluded from managing their finances in a way which works for them.

“It is vital that access to cash is protected, both as a means of payment but also as a valuable back-up to when the digital options fail.”

Both Age Scotland and consumer group Which? called on the next UK government to ensure that access to cash is protected for as long as needed.

Gareth Shaw, head of money at Which?, said: “Consumers have made it clear that cash is a vital back-up when digital systems fail so it’s clear the next government should urgently introduce legislation to protect it.”

The figures come in the wake of another turbulent time for TSB and its customers. On Friday, some account holders were left without their salaries as the bank failed to process overnight payments. The bank also announced this week that 82 branches will shut next year.

Last year a major IT meltdown left TSB customers without access to services and dragged on for months.

Meanwhile in August this year RBS and Natwest customers were also unable to access online banking for up to nine hours due to IT problems. And Lloyds and Halifax customers were locked out of internet banking in October.

A spokesman for RBS said: “Our systems are resilient and we have invested significantly in them to help keep our customers safe and secure. Our service availability level for customers is 99.98 per cent. However, we are not complacent and we will continue working to improve our service to minimise any incidents.”

Stephen Jones, chief executive of trade association UK Finance, said: “Operational resilience is crucial in a modern financial system and the industry continues to invest billions to ensure systems – human and digital – are robust and secure. When incidents do occur, firms work around the clock to minimise disruption and get services back up and running as quickly as possible.”