Banking Downtime & Outages: It’s Time to Make a Change

When it comes to banking, the only acceptable amount of unexpected downtime is zero. Some may call that an unrealistic expectation, but in the banking sector, it’s non-negotiable. Customers depend on uninterrupted access to their funds, anything less isn’t just inconvenient, it’s unacceptable.

In recent months, a string of high-profile banking outages has made headlines. The immediate fallout is predictable: negative press, reputational damage, and a loss of customer trust, if not outright customer attrition. But beneath the surface, outages trigger a cascade of other challenges, some acting as root causes, others as long-term consequences that compound the damage.

Today, we’re taking a deeper look at the issue of banking downtime, what causes it, what happens when it strikes, and the growing risks financial institutions face. More importantly, we’re exploring a key solution that many banks are still missing, one that could mean the difference between business as usual and a full-blown crisis.

The Problem

In the United States, banking outages are not just occasional hiccups; they're a persistent and growing concern. Recent incidents have left thousands of customers unable to access their accounts, make payments, or even view their balances, leading to widespread frustration and a significant loss of trust in financial institutions.

The root of banking outages is varied: 56% stem from security incidents, 44% from application or infrastructure failures. Cybersecurity-related human error is a key factor, cited by 55% of financial institutions, while malware attacks (43%) and third-party application issues (28%) also contribute.

For customers, the impact is immediate and personal. Imagine being unable to pay bills, transfer funds, or access your paycheck due to a system outage. For corporate clients, a bank's downtime can halt payroll processing, delay transactions, and disrupt operations, affecting not just the business but also its employees and partners.

Globally, the situation mirrors the U.S. experience. A study in the UK found that major banks typically experience more than one outage per month. These incidents highlight a critical issue: as banks worldwide push for digital transformation, their IT infrastructures often struggle to keep pace, leading to increased system failures.?

The True Cost of Downtime

Banking outages come at a steep price, an hour of downtime costs an average of $9.3 million in the financial sector. That figure includes immediate losses, fines, and remediation, but the real damage runs deeper. Trust is currency in banking, and outages send a clear message: this institution isn’t reliable. When systems go dark, banks don’t just lose money. They risk losing customers for life.

And the fallout doesn’t stop there. Corporate clients rely on seamless banking to function, and every minute of downtime costs businesses an average of $9,000, adding up to $500,000 per hour. Payrolls stall, vendor payments fail, and supply chains unravel. A single outage can trigger a domino effect that leaves businesses scrambling, contracts broken, and reputations damaged. The financial ripple effect isn’t just disruptive, it can take weeks or months to recover from.

From the Customer's Perspective

A significant 91% of consumers consider security and fraud protection crucial when choosing a digital banking platform. Weak fraud prevention is a major concern, with 40% of customers identifying it as the biggest pain point with their current payment providers.?

Immediate service is also a top priority, as 72% of customers desire prompt assistance. This demand for quick responses underscores the importance of efficient customer service in banking.?

Furthermore, only 18% of consumers believe it pays to be loyal to their bank, indicating a readiness to switch providers if dissatisfied.?

These statistics highlight the minimal tolerance customers have for service interruptions. In an era where alternatives are readily available, banks cannot afford to falter in delivering consistent and secure customer experiences.

The Solution is Simple

The answer to banking downtime isn’t complicated. It’s a backup core. A backup core ensures that critical banking functions, like payments, transactions, and account access, continue without disruption, even when primary systems fail. It’s not a luxury; it’s an expectation in today’s always-on financial world.

"Banking downtime isn’t just an inconvenience, it’s a liability. Customers don’t wait around when they can’t access their money, and businesses can’t afford to. In today’s world, a bank’s credibility is directly tied to its uptime. If you can’t guarantee stability, you’re already losing." — Jeff Althaus, President & CEO of Mozrt

Yet, many financial institutions still lack a true backup core, relying instead on outdated disaster recovery plans or assuming their cloud services are enough. As recent outages have proven, redundancy isn’t optional, it’s essential.

The Mozrt Core is built for this exact purpose. It’s an API-first, cloud-native core that integrates seamlessly with existing systems, offering real-time processing, constant availability, and failover capabilities. Whether used as a backup core, fintech core, or an innovations core, the Mozrt Core ensures that when things go wrong, banking services keep running as if nothing happened.

"Banks are expected to be open 24/7, 365 days a year. That’s the baseline. A backup core should be part of every institution’s strategy, not just an afterthought." — Jeff Althaus

The bottom line? Downtime is no longer an inevitability. It’s a choice. The banks that invest in resilience will be the ones that thrive.