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Are Banks Still Not Ready for Digital Transformation?

Posted by Anna Mielczarek on 23-Oct-2018 07:30:00

Digital Transformation can be a real challenge for the financial sector. In the past few years a great majority of well-established, traditional banks have tried to become more digital in order to address the emergence of new challenger banks that have been slowly taking away their customers. But unfortunately, many projects end in failure as financial institutions have a hard time getting real results. Most banks are focusing on polishing the front end so much that they almost seem to forget that it must be supported by back end as well. And this approach results in crushing systems which leave customers unable to log into their bank accounts.

So, what are some of the examples of banks not being fully prepared for digital changes they have implemented?

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1. HSBC  

On Friday, the 28th of September HSBC alerted its UK customers to a problem in a social media post after people started reporting issues with its mobile app at 7.45 that morning. It is essential to mention that this day was most likely a payday for many thousands of people who due to disruption to services were unable to log into their account on mobile app. The issue has been later resolved, however no explanation was given, leaving people confused and frustrated as it was unclear how many people were affected by the failure or if it was the result of an IT glitch or something more sinister.

Regardless of the reason the problem was taken care of, and people were hoping it will not occur again.

However, it was not the case. On the 16th of October, just 3 weeks after the previous glitch in September, some of bank’s customers were unable to access online banking again as this time HBSC website was not working.

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Yet again, HSBC customers have expressed their frustration and dissatisfaction with the bank as this kind of issues can cause significant disruption to customers, who are increasingly dependent on digital services as banks close branches and encourage clients to move online.


2. TSB

TSB had to shut down services for two days from the evening of Friday, the 20th of April in order to move customer data from former owner Lloyds to a new IT system managed by Sabadell. It was one of the biggest transfers of banking data ever attempted in the UK as it involved the switch of 1.3bn TSB customer records!

However, it fell into turmoil when on Sunday 22 April millions of customers reported being unable to access their online accounts or the TSB mobile app, as well as having access to random people’s bank details. As a result, 40,000 complaints had been received after unacceptable customer experiences.

Unfortunately, just few months later in September, TSB customers have faced another IT failure at the bank, with many unable to access their online and mobile banking. Again, hundreds of customers complained of issues including ‘duplicate transactions’. Apparently, TSB undertook planned maintenance on its website on Friday, but claimed that issues experienced by customers on Monday were unrelated. It said problems were first experienced by customers on Sunday afternoon and had been resolved.


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But that’s not all. On the 28th of September (similarly to HSBC) TSB Bank’s internet banking and mobile app services for Android and iOS were not working for UK customers making it the second time in one month the bank has suffered from a UK outage.


3. Barclays 

On the 20th of September Barclays has suffered a major outage, with customers unable to access their accounts using online banking. Although, customers were still able to view their balance and make payments through the mobile app, the bank's website noted issues with online banking, telephone banking and branches.


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And only 8 days after the issue, Barclays customers were yet again struggling with accessing online banking. On the 28th of September, just like HSBC and TSB, Barclays customers experienced problems with moving their money or making payments.  Independent outage monitor Down Detector registered over 300 reports at one time from users insisting the service was not working.





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Topics: Finance, Digital Transformation, Emerging Technology, Challenges