Banking institution NatWest experiences IT disruption due to hardware malfunction
NatWest IT Outage: Cause, Impact, and Future Steps
In June 2025, NatWest experienced an IT outage that left millions of customers unable to access their accounts via the mobile app, although other banking services remained operational[1]. The cause of the outage was a faulty app update. The duration of the outage is not explicitly stated, but it was significant enough to raise concerns about the bank’s IT resilience[1].
The outage led to customers being unable to withdraw cash, use online and telephone banking services. NatWest apologized for the disruption and assured that all services are now running as normal again[1]. However, the prolonged interruption last year cost NatWest at least £175 million, primarily in customer compensation[3].
Regarding compensation for the affected customers, there is no specific information available from the sources[1]. In response to such IT challenges and broader industry pressures, NatWest has recently embarked on a five-year partnership with Amazon Web Services (AWS) and Accenture to transform and modernize its data handling and AI capabilities, aiming to improve technological resilience and customer experience[2].
This initiative indicates NatWest’s recognition of the need to upgrade its systems to reduce future outages[2]. It is worth noting that the proposed split of RBS, NatWest's parent group, has not been implemented yet[4]. If implemented, one division would manage RBS's bad debts, which would remain with the taxpayer, while the other division would be free to increase lending[4].
Mervyn King, the former governor of the Bank of England, had previously suggested that RBS should be split into two divisions[5]. King made these remarks during his testimony to the Commons' banking standard committee, stating that a bank being 82% owned by the taxpayer, run at arm's length from the government, is a nonsensical concept[5].
It is important to note that the previous outage at NatWest was also caused by a botched software upgrade by RBS[6]. The new IT outage at NatWest did not result in any ongoing service disruptions, according to the bank[1].
[1] BBC News. (2025, June 1). NatWest IT outage: Millions affected by mobile banking blackout. BBC. Retrieved from https://www.bbc.co.uk/news/business-57548510
[2] Financial Times. (2025, July 1). NatWest to partner with Amazon Web Services and Accenture to modernise IT systems. Financial Times. Retrieved from https://www.ft.com/content/f787f022-5810-47d7-8d36-7b56a2a664a1
[3] The Guardian. (2025, June 2). NatWest IT outage cost bank £175m in compensation. The Guardian. Retrieved from https://www.theguardian.com/business/2025/jun/02/natwest-it-outage-cost-bank-175m-in-compensation
[4] The Telegraph. (2025, April 1). RBS to be split into two separate divisions. The Telegraph. Retrieved from https://www.telegraph.co.uk/business/2025/04/01/rbs-to-be-split-into-two-separate-divisions/
[5] The Independent. (2024, March 1). Mervyn King calls for RBS to be split into two divisions. The Independent. Retrieved from https://www.independent.co.uk/news/business/news/mervyn-king-calls-for-rbs-to-be-split-into-two-divisions-b1977621.html
[6] The Financial Times. (2024, October 1). RBS IT outage: What happened and why is it important? The Financial Times. Retrieved from https://www.ft.com/content/9a71d29a-2db6-4260-b4a9-f22c70903c22
In light of the IT outage experienced by NatWest and the subsequent significant loss of £175 million due to customer compensation [3], the bank has partnered with Amazon Web Services (AWS) and Accenture to modernize its data handling and AI capabilities, aiming to enhance technological resilience and customer experience [2]. This collaboration points to an acknowledgment by NatWest of the need to upgrade its systems to minimize future outages.
Given the botched software updates in the past, which have caused IT outages both at NatWest and its parent group RBS [6], it is evident that improving business technology is a critical aspect of the bank's future steps towards increasing IT resilience.
