The deputy chief executive of a global bank recently summed up what he saw as the sector’s biggest challenge: “Our chief concern is no longer how to attract the best bankers. It is how to attract the best IT staff.”
This evening’s shambolic payment protection insurance (PPI) deadline once again put a spotlight on that challenge, with a rush of online complaints proving too much to handle for several of Britain’s most established banks.
Read more: Banks buckle under strain of PPI claims
Apps froze, websites crashed and phone lines remained unanswered, prompting customers to vent their outrage on social media.
It is a tale that is sadly all too familiar among many customers of high-street lenders that have run into difficulty amid the rapid shift towards online and mobile banking, and subsequent seen much of their customer base eaten up by “challenger banks” such as Monzo, Revolut and Starling.
For years and years banking titans have struggled with legacy problems in their IT infrastructure; it appears these issues have still not been solved, while newer and more nimble outfits impress customers with their slick, reliable apps.
Last year the Financial Conduct Authority (FCA) found a 138 per cent increase in technology outages, as the likes of TSB and Visa came under intense scrutiny for several high-profile IT blunders.
While many recent mishaps have been down to unexpected meltdowns, the industry has been very much aware of this deadline for several months. So why did banks struggle to respond to the last-minute surge in PPI complaints, blaming high traffic volumes for subsequent technical issues?
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There is no doubt that customer volumes were exceptional – one employee at the FCA described its website hits yesterday as “unprecedented”.
But if the old banking titans are to stop leaking customers to fast-growing challenger rivals, then many of them must start to show that they have a grip on the very same technology which is currently disrupting their sector.