ANY sufficiently advanced technology is indistinguishable from magic,” was science fiction master Arthur C Clarke’s third law of prediction. Unfortunately, its consequences aren’t too often examined for business, as RBS seems to be now finding out.
The problem with technology that looks like magic is that it looks easy – a few swipes, a few taps and almost anything is possible. It becomes hard to remember that behind the dematerialised world of communication and exchange that brings so much convenience to our daily lives exists lines of code and elaborate machines that have to be written, designed and made to work together.
There are problems of encryption, problems of designing interfaces that seem simple enough that anyone can use them. Even problems that are worse for big, established firms – the weight of an out-of-date legacy system can be crippling even while Moore’s Law is providing new power to nimbler competitors.
It’s hard, complicated work at the back end, a million miles from the effortless technomancy that gets presented to the consumer. Unfortunately that means it’s all too easy for businesses to share the consumer’s sense of magic. They may feel that issues can – at best – be solved simply with more money and resources, or at worst that going online is a simple, cost-saving exercise that doesn’t need much attention or money at all.
In this light, the news that the sale of RBS branches to Santander may have faltered over technical incompatibility, which seems extraordinary on first hearing, given the time and money lavished on the deal, is all too plausible. Especially given the vivid memories of RBS’s computer glitch this summer, which left customers without access to their accounts, and for which in August it admitted it was setting aside £125m to cover compensation.
Some sources have apparently described RBS’s system as mediaeval, but it seems the sale faltered over a coordination problem between two systems that were both massively different. The recent Verde deal which saw Lloyds offload 632 branches to the Co-operative Group only went through because of an agreement that the Co-op could use a version of Lloyds’ technology.
There has been talk lately over how to make bank accounts more portable for customers, but perhaps banks need to think about common technical standards that might make the transfer of millions of accounts more straightforward. Otherwise we may see the spread of the sort of model pioneered by new US challenger Simple. Simple poached one of Twitter’s top team to help it build a model that separates the technology platform from the bank: relying on others to provide the financial services, it simply aims to provide the sort of magical technology platform that big banks seem so unable to deliver.