The RBS Group has emerged from its nightmare fortnight battle-scarred and wiser. There can be no doubt now about the direct correlation between IT systems and the public mood. When systems work, everyone takes them for granted, but when they fail – as the systems of NatWest, Ulster Bank and RBS did so spectacularly – they can become a lightning rod for customers’ deep-seated frustration with an organisation’s services.
That RBS Group is 84 per cent owned by the government only made matters worse. Customers are in rebellious mood, not just in the banking sector, but across many others too.
Doubtless, many CIOs, IT directors and senior technology leaders within the private and public sectors thought “There but for the grace of God…” as the story broke. As Computing reported at the height of the crisis, the first problems with NatWest’s systems had emerged much earlier than the national press had been saying.
So it is to the credit of Colin Gibson, head of architecture for the markets and international banking division of RBS, that he appeared at Computing’s Big Data Summit on 28 June and gave a bold, forward-looking presentation about the banking group’s data strategy.
The wider financial crisis in the UK and other Western economies means businesses are at last taking data architecture seriously, said Gibson, adding that the onus was now on all organisations, and the financial services sector in particular, to gather information from disparate systems and use it to provide insight into potential crises.
And yet the crisis caused by one bank’s failure was all too predictable: profit-driven deadlines; a lack of internal responsibility; poor version control; lax management; opaque relationships with outsourced suppliers; cut-price testing by companies who had no understanding of the business, and so on. How many other banks – and other companies, for that matter – might have been in RBS’ shoes last month?
As Bank of England governor Mervyn King called for an investigation into RBS Group’s IT failings, a former senior IT manager at RBS wrote exclusively for Computing about what caused the 10 days of problems that affected RBS, NatWest and Ulster Bank customers.
“When I first moved to RBS the most serious issue I found was poor source control; nobody knew what code was running in the production system. In fact, there was a high degree of confusion regarding where the code was in general,” he wrote.
“Not long into my role, I had to declare a complete freeze on all changes to my systems (even bug fixes) because of the damage my (inherited) team was doing.
“Testing is one of the most crucial parts of the software lifecycle... but I still get the feeling – in bank after bank – that it is not really taken seriously.
“In RBS, testing was aggressively moved offshore because the testers were cheaper and almost always computer science or engineering graduates. But the reality of testing is that testers need to understand what they are testing from both a functional and a business perspective.”
Of course, any systems failure that puts customers’ financial security, credit ratings and mortgages at risk is guaranteed to cause public rage, but it is clear that at least some of the anger expressed towards RBS Group concerned the failures of the banking system in general, and also the attitudes of some large organisations to their own customers.
RBS Group did not help its cause by setting up a premium-rate 0845 helpline, and thus appear to be profiting from the crisis at a time when some people could not pay their bills, buy food, receive
their wages, or complete on house sales.
The long-term repercussions of this remain uncertain in an economy where people’s individual credit ratings are perceived (wrongly, in many cases) to be the only benchmarks of their financial security and viability.
To a large extent, the UK economy has been turned on its head by the financial services sector and the bigger someone’s debt already is, the more money the financial services industry is prepared to lend them. At the heart of this absurd, nonsensical system are algorithms that essentially run every high street bank in the UK.
CRM systems and call centres are a further cause of widespread public disquiet about some parts of the UK economy. Within the financial services sector, IT leaders doubtless feel that they have ploughed targeted investment into making their relationships with customers more efficient and cost-effective. But for many people, their banks (and their credit suppliers, mortgage providers, insurers and utilities) have sometimes appeared to take great strides away from the customer.
Technologies that are designed to provide the fabled “single view of the customer” can, from the customer’s perspective at least, appear to hold them at arm’s length and – in extreme cases – in apparent contempt.
The crisis in RBS should serve as a warning to every large enterprise and organisation. In today’s social media-driven age, everyone knows that technology can – and should – be used to connect people, facilitate conversations, and help share information. Any organisation that uses technology to distance itself from its own customers and to, very transparently, cut costs and increase its profits at the customer’s expense, deserves to fail.
Chris Middleton, Editor
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A discussion of the "risk perception gap", its implications and how it can be closed