New Age Banking in an Age of Increasing IT Service Transparency

With new and upcoming mandates requiring full disclosure on IT service quality, fintech companies will want to get in front of the requirement to build digital trust with customers.

If you’re shopping around for banking products, it’s a breeze to compare all the offerings out there. Need to open a new personal account and are looking for the best interest rate, fewer overdraft stitch-ups and great loyalty carrots, all backed by great customer service? No problem—just access one of the many price comparison websites specializing in financial sector services and away you go.

But while these services do a fair job at presenting the financial fruit and fine-print, what they’ve lacked is the means to help customers compare offerings based on another critical performance indicator—IT service quality. Sure, we can find the best rates, fees and options, but if like most you want surety that the supporting fintech (financial technology) will be there when you need it, think again. That’s because financial institutions haven’t been mandated to provide details on the efficacy of their technology.

Yet this is starting to change—especially in the UK.

Total Tech Transparency

In the wake of some pretty calamitous 2018 banking tech meltdowns impacting the Brits, the Financial Conduct Authority (FCA) recently announced the enforcement of new rules committing financial institutions into revealing the number and frequency of, wait for it—online outages. So along with their fruit, banks must now lay bare any major operational and security badness. This means publishing information on their websites in a consistent and readable format, with the bigger banks expected to go further by serving up information via an API compliant with the Open Banking Standards, including: total number of incidents reported; incidents affecting telephone banking; incidents affecting mobile banking; and incidents affecting internet banking.

And, as the UK’s Open Banking website points out, this along with other data could be used by a comparison website to get up-to-date information about banking products and enable customers to identify more competitive services. The truly competitive being those that best serve a customer’s specific needs and not fall in a technical heap while attempting to do so.

But while demonstrating and reporting operational resilience using open goodness and broad metrics is one thing, delivering it is another. Over the decades, many large financial institutions have acquired a rats-nest of tech, failed to adequately invest in modern infrastructure, or fallen foul to some suspect outsourcing arrangements. And with nimble fintech companies nipping at the healsheels, lower transactional profit margins and increased customer expectations all necessitating faster change, any inherent IT brittleness carries greater risk. Or as the FCA more gravely puts it—threaten the viability of individual firms and cause harm to consumers and other market participants in the financial system.

Yet it all the gloom and doom, transparency dictates like these represent an opportunity for forward-thinking companies to build more lasting and mutually profitable relationships with their customers. By opening-up a dialog and being upfront about service outages and system changes (planned or otherwise), businesses can hopefully progress towards the nirvana state of trusted financial partner.

Create Customer Trust

Of course, the more sceptical amongst could argue that reporting broad and nebulous IT performance indicators can be easily gamed. All true for organisations skilfully adept at constructing vanity metrics across a variety of technology silo’s, but not so for the more customer-centric. Rather than dutifully meet their reporting obligations, they’ll go above and beyond; translating their technical dexterity into terms immediately relatable to and understandable by their customers. Like for example reporting how fast they are at opening personal accounts for customers, processing fund transfers, how long they take to replace a lots or stolen credit card or approving an online housing loan application—customer outcomes over technical outputs. Yes, future FCA disclosure obligations will require this information, but the more progressive won’t wait for the dictate.  

While the UK’s FCA transparency mandates are a great start, we’re not quite at the point where customers have enough clear information to reliably compare financial products based on underpinning IT system performance. However, one thing remains certain. Customers are increasingly making brand and product choices based on the digital experiences their providers deliver—no matter how established or entrenched the institution believes itself to be.

Bold companies understand this implicitly, the rest will hope they can keep dodging and hiding any major outages or security breach. But that’s a big gamble when every glitch and tech stuff-up now becomes open for all to see.     

Peter Waterhouse
By Peter Waterhouse | August 28, 2018