A financial services group has paid out compensation after around half a million people had their personal details exposed because of a system error earlier this month.

The company revealed that almost 448,000 patrons of its Lloyds, Halifax and Bank of Scotland divisions found themselves able to view other people’s payments or had their own information shown to other users because of technical issues on March 12.

Jasjyot Singh, who leads customer relations at Lloyds, expressed regret for the incident in a letter submitted to Parliament’s Treasury Select Committee, describing the scope of the technical problem.

The banking conglomerate confirmed that 114,182 people viewed other customers’ payment records once these became accessible.

Consequently, these individuals may have been capable of seeing more detailed information including account particulars, national insurance numbers and payment reference codes.

The organisation has so far distributed £139,000 to 3,625 customers who suffered upset and disruption because of the system error.

The company indicated that no customers have been identified as having suffered financial losses because of this occurrence.

The letter additionally mentioned that personal data belonging to people who were not customers of the Lloyds group was likewise displayed.

Lloyds clarified that the incident stemmed from a software defect caused by an overnight technical update.

Dame Meg Hillier, who chairs the Treasury Committee, observed that modern banking methods now allow people to carry out many tasks on their smartphones within seconds, from almost anywhere. She noted that what this situation demonstrates is that there is a trade-off. By moving more of our banking activities online, people place trust in technology that can suffer unexpected failures.

A Lloyds representative explained that on March 12, some customers using the app may have briefly seen other people’s transactions following a technical change. The issue was quickly spotted and fixed, and the company has contacted customers whose transactions might have been visible during that short time.

At the time of the incident, a spokesperson for Lloyds Banking Group told Newsquest that the company apologised that some customers had trouble seeing transactions in the app for a short period that morning. The issue was promptly resolved and the company was looking into what happened.