Featured by Financial Brand – When Your Partners Fail: Lessons from the Capital One Outage

When a third-party vendor failure knocked Capital One's banking services offline for days in January 2025, thousands of customers lost access to their accounts. The incident reveals the growing risks as banks rely on external providers and highlights the importance of a crisis communications strategy.

Lessons from Capital One’s January 2025 Outage

While Capital One’s outage was caused by a third-party vendor failure, real damage can come from inconsistent messaging and delayed updates that left customers in the dark. Now, Capital One is facing a class-action lawsuit from customers impacted by the outage. This incident underscores the need for clear, timely, and proactive communication during service disruptions.

1. Delayed and Vague Statements Increase Frustration

Capital One’s initial public statement acknowledged the outage but lacked specifics on the scope of the problem or when it would be resolved. The bank waited until late Thursday night, hours into the outage before sending its first customer-wide email, stating that services were expected to gradually return to normal over the next day.

A lack of immediate details left customers uncertain about whether their direct deposits had failed, when they would be processed, and how long the outage would last.

2. Social Media Outcry Amplifies a Crisis

As the outage continued, Capital One customers took to social media to complain, searching for updates on when their accounts would be restored. Hashtags like #CapitalOneDown began trending on X (formerly Twitter), with customers sharing screenshots of blank account balances, failed transactions, and unresponsive customer service chat windows.

Without updates from Capital One, customers speculated about the cause and timeline of the resolution, driving further anxiety and frustration.

3. Lack of Clear Resolution Timeline Leads to Uncertainty

Throughout the outage, it was difficult for customers to determine a timeline for when services would be fully restored. The bank informed customers that services would gradually return, but did not specify exactly when transactions would be processed.

This lack of information left many customers uncertain about their ability to pay bills and meet financial obligations, since they had no concrete information on when their funds would be available.

Best Practices for Communicating During Systems Outages

Banks can’t prevent every technical failure, especially when third-party vendors are involved. But they can control how they communicate with customers during a crisis. Clear messaging is essential to maintaining trust and minimizing frustration.

Here are some best practices banks should consider.

1. Treat Every Technical Failure as a Communication Crisis

Banks often approach outages as technical disruptions, focusing on restoring systems before addressing customer concerns. But for customers, a banking outage is more than an inconvenience — it’s a disruption to their financial stability. This is why financial institutions must treat every outage as a communication crisis first, ensuring that messaging is clear, consistent, and provides immediate, actionable next steps.

"Every technical outage should be treated as a communications crisis, emphasizing ‘what this means for you’ and mapping out actionable next steps," Andrea M. Garcia, managing partner and founder at COMMS/NATION LLC, a boutique public relations firm, told The Financial Brand.

Without a cohesive communication plan, customers are left uncertain about whether they need to take action or wait for the bank to resolve the issue. Garcia warns that a lack of clear next steps can push customers to take their business elsewhere, especially when financial uncertainty is involved.

"Frequent customer service transfers and team/manager consultations often result in "next steps" being lost in the process, leaving clients frustrated on the phone and uncertain about the bank’s capabilities in question after the call," says Garcia. "I watched social media videos to gauge public response and test my next steps theory to see if it holds true. Most videos were first-person POVs of customer service call experiences, highlighting inconsistent information provided to customers."

Fragmented or unclear communication only worsens customer frustration and can create long-term trust issues that extend beyond the outage.

2. Deliver Structured, Timely Updates Across All Channels

Unstructured messaging during an outage can lead to misinformation, confusion and increased frustration among customers. A well-planned communication framework ensures all updates are clear, consistent and delivered at the right frequency across all customer touchpoints.

"Disaster recovery (DR) and business continuity planning (BCP) should involve tabletop exercises where a method of communication goes down and an alternative messaging platform needs to be used," John Meyer, managing director of business intelligence and data analytics at Cornerstone Advisors, a bank and financial institution consulting firm, told The Financial Brand.

Meyer noted that some banks follow the ALERT system, a structured method for outage communication that helps ensure customers receive relevant information as quickly as possible. The timing of updates must also be determined based on the severity of the issue to help avoid customer uncertainty. "In vendor management, you rate your services as critical, important or exempt. For critical services, we sent communications hourly; important services, every four hours; exempt services, once a day," Meyer explains.

Banks that follow a structured and proactive approach to outage communication can prevent gaps in messaging and ensure customers aren’t left in the dark.

3. Strengthen Vendor Due Diligence to Minimize Disruptions

Banks increasingly rely on third-party providers for core banking systems, payment processing, and digital infrastructure — but these efficiencies come with potential risks.

"Financial institutions address risks and minimize service disruptions by conducting thorough vendor due diligence, building redundancy through multi-vendor models, and regularly testing disaster recovery plans," Palash Misra, managing director at Stax, a global consultancy, told The Financial Brand.

Vendor due diligence should include ongoing evaluations, not just a one-time assessment. Financial institutions should review how vendors manage risk, including cyber threats, compliance monitoring, and data privacy practices. AI-powered monitoring can provide some real-time issue detection, and regular audits can help confirm that vendors are meeting contractual obligations and maintaining reliability.

Beyond vendor selection, Misra recommends banks diversify their vendor ecosystems to avoid overreliance on a single provider to ensure operations aren’t completely affected by failures from any one vendor. Both Misra and Meyer also stress that stronger vendor service level agreements (SLAs) are essential to holding providers accountable for uptime guarantees.

Without strong vendor due diligence, financial institutions leave themselves vulnerable to outages, security failures and compliance risks beyond their direct control.

Effective Crisis Communication is a Competitive Advantage

As the Capital One disruption shows, banks can’t always prevent outages — but they can control how they communicate with customers during disruptions. When outages occur, customers judge banks not just on how quickly services are restored, but on how well they communicated throughout the disruption. Providing timely, transparent updates can limit frustration and having strong vendor oversight can protect long-term relationships.



Financial institutions that approach outages as communication crises — not just technical failures — will be better positioned to minimize customer frustration and protect their reputations.