IT systems at the high street banks have come under the spotlight again, as another week has seen another set off customers cut off from their cash – and experts say things are set to get worse as new technologies and regulation put more strain on companies' creaking systems.

Customers of Lloyds Banking Group were the latest to be hit by payment problems, after a server failure meant that for around three-and-a-half hours debit card transactions were declined and ATMs up and down the country would not dispense cash. While not as catastrophic as the "glitch" which caused some customers of RBS's banking brands to go weeks without being able to access their accounts properly, it was another sign that ageing IT systems are in need of a serious overhaul.

"The banks do have a problem, but it's not a new problem, and it's not an easy problem to fix, which is why it's taking so long," says David Bannister, editor of Banking Technology magazine. "In the old days these machines just had to run overnight in batch mode – it was like newspapers with just one edition – but now they have to deal with news that is being updated throughout the day. The users – us – are using internet banking, ATMs, we're spending money online. The reconciliation between what is going on in the background is the hard part, and the gulf is widening all the time."

Ben Wilson, associate director of financial services for techUK, says some of the "legacy systems" at banks are 30-40 years old and were originally set up for branch banking, but "then they needed to be ATM-focussed, then there was online banking, then mobile banking". He says: "Banks have bolted on these changes because it is cheaper and less risky than starting from scatch, but every time you bolt on a change it becomes more complex."

'A house of cards'

As well as new banking channels, systems are also tinkered with whenever regulatory changes are made, and when a product is withdrawn or changed.

Jim McCall, managing director of the Unit, which works with banks and other companies on their mobile apps, says that while anyone now building a system from scratch would "abstract out as much as possible so [different elements] are not as reliant on each other", the banks' systems often resemble a house of cards. "If you make a change to a tiny bit of code on one thing it is like the butterfly flapping its wings far away and somewhere someone's mobile app stops working," he says.

To make things more complicated, says Colin Privett, UK managing director of software firm Cast, new functions are usually "written in different programming languages, on different machines, by different teams". He adds: "This prevents a single person/team from ever fully understanding the entire structure of a system. That is why when things do go wrong it can often take hours, or even days, to fix as teams scramble to find out where the problem lies."

'Chronic underinvestment'

After the last round of IT issues at RBS, its chief executive, Ross McEwan, admitted to years of under-spending on its computer systems and said the bank was "investing heavily in building IT systems our customers can rely on". This period of underinvestment saw the bank lay off some of its IT staff, and other banks have done the same.

Privett says across the banks' problems have been compounded by "chronic under investment in these systems, particularly over the past few years when banks had to deal with squeezed budgets, meaning quality checks were often the first thing to get cut".

Mark Holland, a partner at the consultancy firm Holley Holland, says that changes such as increased capital requirements mean that banks have less money to invest, and when they do have cash the back-office is low down the list of priorities. "Very little investment goes into this space – it goes on the sexier types of technology. It always will do – no bank will spend money on shiny new equipment, there is nothing in it for them."

There have always been technical problems behind the scenes, Bannister says, but "they used to happen in the middle of the night" when that one batch payment was done. Now things go wrong during the day and consumers are much more aware of it, as are the media, with websites such as Twitter allow customers to broadcast problems as they arise. Wilson says the IT failure at RBS was a "watershed moment. This has been an industry issue for years, but suddenly it became public interest".

Continuing breakdowns

That's not to say the problems are not getting worse. As banks continue to layer new systems on top of old there will continue to be breakdowns, and they will become more frequent unless more money is spent. "To solve the problem and to make their systems robust a lot of money has to be spent on the back-end," Bannister says.

McCall says overhauling systems is a "huge budget project", and very difficult to do when people never stop using their bank. "It's a bit like trying to change the windscreen while you're driving down the M6," he says. Holland says that even scheduling in maintenance is nigh on impossible. "Payments are going through 24/7 – there isn't a second of time when the system can be switched off. For the banks, periods such as Christmas and Easter might seem like a quiet time, but for a consumer it's the opposite."

Wilson says banks are starting to think about collaborative approaches, realising that the systems that sit behind them do not need to be unique and that they could save money and time by working together. There are examples in the US, where banks are sharing back-office systems. Certainly, the need for robust systems will grow as our changing habits put technology at the forefront of our spending. As mobile payments take over from cash, we will be more dependent than ever on reliable IT.