Of all the days..of all the banks

You really could not make it up. Poor RBS. Cyber Monday in the UK – and its cards systems have a lie down for over three hours. One cards services collapse is unfortunate; two in no time is becoming careless; three in 18 months starts to look like a bad habit. Yes, RBS took to social media, press, radio and TV to offer profuse apologies. It was kind of the least it could do; there is also an element of practice makes perfect. The bank is becoming quite well practised in saying sorry, writes Douglas Blakey

You really could not make it up. Poor RBS. Cyber Monday in the UK – and its cards systems have a lie down for over three hours. One cards services collapse is unfortunate; two in no time is becoming careless; three in 18 months starts to look like a bad habit. Yes, RBS took to social media, press, radio and TV to offer profuse apologies. It was kind of the least it could do; there is also an element of practice makes perfect. The bank is becoming quite well practised in saying sorry, writes Douglas Blakey

One can only sympathise with RBS branch and call centre staff that will be on the receiving end of customer complaints today. Ross McEwan, the recently appointed RBS CEO, is into the second month of his four month strategic review. He will report in February.

His review focuses on 3 key areas:

  • What can RBS do to meet more of its customers’ needs and make itself simple and easy to do business with?
  • How do its operations and IT systems function for the benefit of customers? How do its core systems help or impede its employees in their work for customers?
  • How well does RBS work together as an organisation built to serve its customers?

Just focus on point two for today.

McEwan knows the IT script from his days at Commonwealth Bank of Australia (CBA). In 2008, CBA began a four-year project (budget: A$580m) to upgrade its core banking system, parts of which were over 40 years old. The programme was among the most ambitious banking IT projects undertaken at the time. The IT transformation program at CBA came in at A$1.1bn, so just a tad over-budget. It also came in a few months late. And yes, there were a few inevitable teething problems. The end result today is that CBA has a class leading, reliable, IT system, arguably giving it a competitive advantage over its retail banking peers in Australia.

RBS’ cost-income ratio remains stubbornly high, stuck in the mid 60s. McEwan has targeted a figure in the mid 50s.
He will announce major cost savings when he reports in February. There is talk – and I have written elsewhere – of McEwan announcing an end to RBS’ Group structure. Any such decision will result in further significant headcount reduction, to add to the 41,500 job losses announced by RBS in the past five years.

One area McEwan dare not cut – indeed, he needs to ramp up investment – is in getting its IT strategy right. The other day, McEwan announced that the bank was to spend £30m with NCR on a number of ATMs. He needs to do a bit more than refresh the bank’s self-service offering. It is time for McEwan to be bold when re reports in February.