In a striking contrast of approaches to banking reliability, while UK Parliament's Treasury Committee is investigating major banks over IT failures following Barclays' three-day outage in January, Monzo has revealed its sophisticated backup system that ensures continuous service even during extreme incidents.
For a deep technical dive into how Monzo achieves this level of reliability, check out their detailed engineering blog post about Monzo Stand-in.
Traditional Banks Under Scrutiny
The Treasury Committee has demanded explanations from nine banks regarding their recent IT failures, with particular attention on Barclays' significant outage that left customers unable to access their accounts and make payments for three days. This incident highlighted the ongoing challenges traditional banks face with their IT infrastructure.
Monzo's Innovative Approach
Meanwhile, Monzo has taken a radically different approach to reliability. The digital bank has built what they call "Monzo Stand-in" - a completely independent backup banking infrastructure running on Google Cloud Platform (GCP), separate from their primary system on Amazon Web Services (AWS).
Key Features of Monzo's Backup System:
Dual Cloud Operation
- Primary platform runs on AWS
- Backup system operates independently on GCP
- Different systems reduce the risk of simultaneous failures
Core Functionality Preserved
- Card payments processing
- Cash withdrawals
- Bank transfers
- Balance checking
- Card freezing/unfreezing
Cost-Effective Solution
- Backup system costs only 1% of primary platform
- Minimal state replication
- Focused on essential services
Real-World Proven
- Successfully deployed during a major platform incident in August 2024
- Regularly tested with real customers
- Maintains service continuity during outages
The Contrast in Approaches
This situation perfectly illustrates the growing divide between traditional and digital banks:
- Traditional Banks: Still struggling with legacy systems and experiencing significant outages that can last for days
- Digital Banks: Building innovative solutions from the ground up with reliability and redundancy in mind
Implications for Banking's Future
This contrast raises important questions about the future of banking infrastructure:
Regulatory Perspective
- Traditional banks face increasing scrutiny over IT failures
- Innovative solutions like Monzo's may set new standards for banking reliability
Customer Experience
- Traditional bank customers face service interruptions
- Digital bank users enjoy more reliable service with built-in redundancy
Operational Costs
- Legacy systems become increasingly expensive to maintain
- Modern, cloud-based solutions offer cost-effective reliability
Looking Forward
While traditional banks continue to face challenges with their IT infrastructure, Monzo's approach demonstrates how modern technology and innovative thinking can create more reliable banking services. This may well set a new standard for what customers should expect from their banks in terms of service reliability and continuity.
As banking becomes increasingly digital, the ability to maintain consistent service even during extreme incidents will likely become not just a competitive advantage, but a fundamental requirement. Traditional banks may need to consider similar innovative approaches to ensure they can meet these growing expectations for reliability.
