Following news today that RBS, NatWest, Nationwide and Tesco Bank customers were hit with yet another IT outage, leaving them unable to access accounts and pay bills, Venkatesh Varadarajan, Partner in Financial Services, at Infosys Consulting, comments on why banks need to act now to prevent losing millions of customers.
Coming up against the challengers will be no mean feat, but crucial to retaining customers and moving with the digital age of banking is investing in upgrading legacy systems – and creating systems that will be able to keep up with the pace of innovation and customer demand in FS.
Venkatesh Varadarajan, Partner, Financial Services, at Infosys Consulting, said: “News of yet another IT outage yesterday is just the latest in a long line of crippling IT issues for UK banks in the last year. As we move to a cashless society and a tech-first financial world, banks need to buck their ideas up and improve their technology to support changing consumer behaviour. Those that fail to do so risk losing millions of customers to their competition
“One of the key causes for the wave of IT system outages is the ageing legacy technology estates that banks run on. Most banks have complex, monolithic systems, so scalability, reliability and quick responsiveness to technology glitches is a major issue for banks and payments companies. This week, this led to customers being unable to use their card, access their account, or pay bills at a critical time of the month.
“Outages have a huge adverse impact on customer satisfaction, loyalty and brand image for banks – and lead to increased scrutiny from the regulators. In the end, this leads to customer attrition in favour of the challenger players, who offer a better customer experience backed by modern systems.
“To mitigate these risks, banks and payments providers need to move their technology estate to more digital-first, modern landscapes founded on a component-based architecture and enabled by APIs & microservices. The goal is a system which is more nimble and scalable with faster responsiveness to issues should they come up.
“Importantly, these systems need to be designed with customer experience at their core. They should also cater to newer product innovations in digital banking and cards and payments. This will enable legacy banks to catch up with their challenger rivals and reap the benefits of modern systems.”