It must be a perpetual nightmare being an RBS / NatWest customer. The banking group suffered its fourth technical glitch in 18 months last night, leaving customers unable to access their cash or make electronic payments.
Worse still, the glitch took place on Cyber Monday, one of the busiest shopping days of the year, when retailers launch seasonal bargains on a first-come, first-served basis. It’s not the day when customers of a major bank expect to be left hanging.
The bank has issued its usual apology and promised to compensate customers who end up ‘out of pocket’ as a result of the glitch. But that’s hardly the point, when it’s had so many warnings.
Just over a year ago, the bank’s computer systems were privately described as ‘chronic’ by regulators.
The bank had ended up in a real mess in June 2012 after a faulty software upgrade locked customers out of their accounts and caused widespread disruption. Just a month later, a separate glitch left customers without access to their cash and unable to use their debit cards.
By the autumn of 2012, both Nationwide and Santander had shunned a deal to buy 316 RBS branches because of IT integration issues.
Twelve months on, and unexpected glitches are still cropping up that the bank cannot explain.
RBS IT Nightmare – Timetable
June 2012 – Widespread problems after a software upgrade goes wrong. Account problems last for weeks.
July 2012 – Glitch prevents customers from accessing their accounts and making electronic payments using debit cards.
October 2012 – Santander withdraws from a deal to buy branches, citing IT problems.
November 2012 – Nationwide makes enquires about the branches, but expresses concerns about IT integration issues.
March 2013 – Glitch affects online and telephone banking services, use of cash cards and debit cards.
December 2013 – Glitch on Cyber Monday leaves customers unable to access cash or make card payments.
17% of those switching their bank accounts have left RBS and NatWest. Source: TNS UK
Is it time to make a stand and switch accounts?
Banks used to be able to get away with far more when the old switching system was in place. Customers have long been put off from switching accounts by a drawn-out process that took up to a month to complete.
Now, the tables have turned. Consumers can switch current accounts in just seven days, thanks to the new £750 million switching system that launched in September.
And the bank should be seriously worried. The latest data from the TNS UK switching index shows that an exodus of the RBS Group has begun. 17% of those who have decided to switch have left the bank.
Customers have also identified poor service as the single most important reason behind leaving their old bank behind.
So putting two and two together – let’s not leave that to a banker – it’s not difficult to see how RBS could face major problems ahead unless it sorts out these recurring problems.
Unthinkably (though are there any surprises left these days?), the bank has earmarked a £500 million pool for year-end bonuses. It might wish to consider using this to invest in a decent, reliable computer system fit for 2013 before the last customer turns off the lights on their way out.