Fostering mutually beneficial relationships
There can be no doubt, consumers today interact with their bank accounts more often than they have ever done before. Remember in 2014 when RBS CEO Ross McEwan stated their busiest branch was the 7:01 from Reading to Paddington? No wonder when over 167,000 of their customers were using the mobile banking app between 7am and 8am on their commute to work every day.
The latest from the British Bankers’ Association suggests these figures are still on the rise with 11million separate mobile banking logins each day during 2015 (a 50% rise since 2014).
Clearly fostering a self-serve relationship is mutually beneficial, with consumers being able to choose both the time and place for managing their finances and 86% worrying less as a result. For the banks, this not only helps to save money but also provides an ideal opportunity to cross-sell.
What happens when things go wrong?
The news yesterday that suspicious transactions had been noted on around 40,000 Tesco Bank accounts, with approximately half having money taken, reminds us all of the risks as we push full pelt into a digital world.
Chief Executive Benny Higgins did confirm customers would still be able to use their cards in shops and make cash withdrawals, however, customers were blocked from making payments online using their debit cards and still suffered the frustration, stress and loss of time sorting the situation out.
And although any losses would be met and refunded by the bank inside 24 hours, it’s not easy to compensate for time and stress or the break in trust.
We will see over the next few days and weeks how well Tesco Bank performed on this occasion. However, given that it’s a hygiene factor to expect your bank to be secure and trustworthy, Tesco Bank are certainly now under the spotlight. It’s times like these that customers truly expect service providers to go the extra mile and perform.
Let’s hope some of the money saved from having a self-serve proposition has gone into a disaster recovery solution. Given the procurement processes some financial institutions have, I am sure it must have been a basic requirement and stories of customers waiting hours on the phone or not being able to pay that all important bill will be few and far between.
So what about the future?
Although we are constantly told by financial services firms that past performance is not a great indicator of future performance, their performance handling both personal data and managing technology certainly does not provide the reassurance consumers seek.
With the industry moving towards ‘Open Banking’ where institutions will share the personal financial histories of customers to help tailor future products and services, you can begin to understand why for some, they may not be looking at this future with rose tinted spectacles.
Especially given the wider spate of high profile hacks, combined with the UK financial services industry’s own recent history with both handling personal information and technology.
Let’s not forget the RBS service failures of 2012 and the Nationwide unencrypted laptop debacle which put 11million customers at risk.
Just remember with great power comes great responsibility
There can be no doubt that the advances in technology and the digital push has benefited consumers, and it will continue to do so.
Despite the £700 million a year British banks spend on cybercrime, no system can ever be 100% secure. Today the FCA deemed the attack as unprecedented. It will be interesting to see the impact this breach has on other challenger banks alongside agile fintech start-ups.
Given the impact service failures and hacks can have on people’s lives with the emotional alongside the financial turmoil that can unravel, it’s critical that financial institutions and new fintech startups plan and rigorously test as much as they can their service recovery disaster and response plans.
Remember – every little helps.