Category: Banking

The freedom to access your money and use it as you wish is being diminished…

Posted on by The Information Badger in Banking, Online Safety, Online Services, Security

UK banks blocking individuals’ accounts without explanation has garnered media interest recently, see here for example. Your money is yours as long as you can access it and have the freedom to use it for your needs and desires, but a recent experience which caused the Badger inconvenience and frustration shows that this premise continues to erode.

A builder working on the Badger’s home took an hour out to visit their bank’s nearest branch to withdraw ~£1600 cash. They returned angry and without their cash. At the branch they were interrogated about what the cash withdrawal was to be used for. The builder explained it was to pay his friend for parts from a classic car being cannibalised for spares. The parts were to be used on his own classic car being restored as a hobby in his garage. The bank refused the withdrawal citing ‘security’ and the absence of any invoice. Sharp words were exchanged, with the builder asserting that it was his money, it was none of the bank’s business what he wanted it for, and that their interrogation amounted to an invasion of his privacy. The bank was unwavering, and the builder left without his cash.

The following day a self-employed groundworker laid and connected a new drain for the Badger. The agreed price (<£1000) for the work was based on payment of their invoice using online banking within two days of the work being completed to the Badger’s satisfaction. Payment was thus straightforward and quick, wasn’t it? No. It took two hours. Because the groundworker banked with Metro Bank, the Badger’s bank’s IT systems assumed they were potentially a scammer! A text message notified the Badger to call his bank’s Payment Fraud team if he wanted the payment to proceed.

On calling, the Badger was interrogated about the payee, the payment, the work the payee had done, and much more. It felt as if the Badger wasn’t being listened to, and that the call handler’s primary focus was capturing evidence that the bank fulfilled its money laundering and funding of terrorism obligations. The lengthy call ended when the Badger was told the payment would stay blocked until he called the Payment Fraud Team again after speaking to the groundworker to confirm they existed and were the payee! To put it mildly, the Badger was livid. Twenty minutes later the Badger called the Payment Fraud Team again, went through exactly the same lengthy questioning with a different call handler, but this time he managed to get the payment unblocked.

With local bank branches a rarity in the UK, online banking the norm, and society increasingly cashless, the freedom to access and use your money as you wish is, for most people, continually being diminished. But that’s not a surprise, because history shows the banks always seem to get away with whatever they want…

Saving, inflation, and a takeaway…

Posted on by The Information Badger in Banking, Life

The Bank of England is holding interest rates at 0.1% and forecasting that inflation will reach 5% by April 2022 (see here and here). They are also signalling that interest rates are destined to rise, with most pundits suggesting the rise will be to 0.25% sometime next year. With this continued huge gap between interest rates and inflation, it’s obvious that anyone who’s been thrifty and built even modest savings in a bank or building society account continues to be massively penalised for their prudence. There’s no point having savings in a bank anymore, and with shrill commentary  rampant  in politics, the media, and on social media about commodity prices, energy supply problems, labour shortages, computer chip shortages, and general supply chain woes, there seems little point in trusting that the future economy will be stable, or in believing that inflation will be limited to the 5% the BoE is predicting.

The Badger isn’t normally so gloomy, but there are a few signs that this decade could see the kind of inflation turmoil last experienced in the 1970s. Two particular things have influenced the Badger’s mindset, namely looking at a graph of UK Inflation since 1960, and purchasing a meal from a Chinese Takeaway in Crawley. Firstly, the graph shows that the UK inflation rate hasn’t been close to the BoE forecast of 5% for 30 years. With the world the way it is at present, the time seems right for a period of inflation turmoil akin to that of the 1970s. Secondly, the takeaway was 10% more expensive than the same meal two weeks ago. The outlet in question, one the Badger has used many times, has a notice in the window telling customers that 10% will be added to the prices on the menu to cover rising costs. Customers have complained, apparently, but as yet there’s been no drop in footfall. When the average person is already paying 10% more for their takeaway, 10% more to fuel their car, and likely much more to heat their home, then it’s not unreasonable to think that the BoE’s 5% inflation forecast, and thus the ceiling of the last 30 years, will be breached.

The derisory interest rates on savings and their large disparity with inflation look destined to continue for a long time yet. When money is guaranteed to massively lose its purchasing power, there’s little point in parents and grandparents encouraging thrift and prudence in kids. Encouraging them into the habit of saving is under considerable pressure and could be facing extinction, which would certainly be to the detriment of society.

The Badger’s wife, helping our grandson drop a few coins into their piggybank, says the Badger’s pessimistic outlook must be a reaction to his recent Covid booster jab. The Badger doubts it, but you never know…

Bank branches, the decline of the High Street, and risk with online-dependence…

Posted on by The Information Badger in Banking, Change, Life, Online Services, Risk

Living in a town of 14,000 people, it’s painful to watch the decline of its ancient, characterful, High Street due to the impact of the modern online world. This week it was announced that the town’s last bank branch will close later in 2021. There were 6 major banks on the town’s High Street in 2015, all of which had occupied historic buildings for decades. In a few months there’ll be none and all the old buildings that housed them will be empty. The nearest bank branch will be 10 miles away, the town will have just 2 ATMs, and the local Post Office will be the only place providing basic banking services.  Apart from its empty premises, the High Street is already dominated by more coffee shops, eateries, hairdressers, and estate agents than appears sustainable. This is the same in many towns because the world has become online-first and our behaviour has changed.     

The COVID-19 pandemic has accelerated the adoption of online-first for everything. The use of physical money – cash – for in-store purchases halved in 2020 and the downward trend is unlikely to change. As cash disappears, we’ll soon see people rattling charity tins for donations, tip jars on the counters of coffee shops, collection plates at church services, and funfair slot machines all disappear too.  Banks can’t be blamed for behaving like the businesses they are, or for adapting to the needs and expectations of their digital-native customers, especially those born since the 1980s, but the closure of physical branches does impact on society, as outlined by the parliamentary report here.  The High Street’s decline isn’t the fault of the banks, it’s a consequence of the internet, relentless progress in digital technology, and our own behaviour. The decline comes with a sting in the tail for completely digital-native generations as they get older, because the concept of local community is eroding and being replaced by the personal isolation that comes with total dependence on the online world.

A society that’s online dependent for everything isn’t free of risk. The pandemic illustrates just how disruptive a biological virus can be, so just think how troublesome a future global cyber equivalent – deliberate or accidental – could be if you can’t access your money or do anything online. It’ll never happen, you say.  Never say never, especially when 20 years ago people worried about a ‘millennium bug’, 10 years ago there was a global banking crisis, and recent cyber incidents have caused chaos with fuel pipelines and forced store closures. If a cyber-space catastrophe happened, there’ll be no point meeting anyone for coffee in the High Street, because the High Street won’t exist and there’ll be no means to pay for the coffee. It won’t be the fault of banks; it will just be the manifestation of one of the current risks in modern life that we don’t seem to think too much about.

Software defects…a fact of life.

Posted on by The Information Badger in Automation, Banking, Education, Internet of Things, Smart & New Technology, Technology

The Badger recently used a bank’s online processes to establish formalised ‘power of attorney’ control over someone else’s accounts. Formalising the ‘power of attorney’ and setting up the associated internet banking facilities was pleasingly easy. Everything went smoothly. This week, however, the Badger encountered a problem. Not a major one, more an inconvenience. The Badger, as ‘power of attorney’, set up a new payee in order to pay a small invoice the same day. However, a ‘technical failure’ error message appeared every time the Badger tried to send the payment. Grr! The Badger called the bank, who were very helpful. It was a known problem – a software defect. If you are a ‘power of attorney’ and click the ‘send payment immediately’ box, the software won’t let you send a payment! The solution? Click the ‘send at a future date’ box – i.e. tomorrow – instead. The solution worked perfectly.

The Badger wondered why this ‘software defect’ hadn’t been picked up in pre-release testing. The experience was also a reminder of how reliant we are on software and on it working correctly. It was also a reminder that software will always contain defects even when the best design, development and testing practices have been used. While the Badger cogitated on this, he saw last week’s reports from the US about the software for Boeing’s reusable spaceship, Starliner. The reports, here for example, highlight a review following the unsuccessful Starliner test flight to the International Space Station(ISS) in December 2019, which has exposed ‘process’ failings in the software design, development, testing and assurance oversight of the ~1 million lines of code. Oh dear. There are obviously many more defects in the software than the ones that impacted the mission in the first place. The Badger raised his eyebrows in surprise. After all, well-established engineering disciplines and processes for producing quality software have been around for a long time and are there for a reason.

Software runs the modern world. It’s everywhere. Its scale and complexity have risen dramatically in recent decades, and when software goes wrong it can have wide ranging, unwelcome, and sometimes disastrous impacts. You can get a sense of the scale of some codebases here and you’ll find some of the software failures that have wreaked havoc and disruption in recent years here. Without software, modern civilization would grind to a halt.

Years ago, the Badger was told ‘Never expect software to be perfect’. Wise words still relevant in today. AI, autonomous vehicles, robots – and so on – are not immune to having software defects, so when you go about your daily life just remember that a software defect is always lurking somewhere, and that it will manifest itself at the most inconvenient time. That’s just a fact of life in today’s world!

The Sillybilly Bank (TSB)…

Posted on by The Information Badger in Banking, Business, Delivery, Education, Ethics & Regulation, IT Project Management, Systems Integration, Uncategorized

Mainstream IT services companies wouldn’t be around today if they hadn’t learned lessons from poor delivery over the years. That doesn’t mean their delivery machinery is perfect – far from it – but it does mean they’re generally good at identifying and addressing risk. With 35 years IT delivery under the belt, the Badger’s nose still twitches when he sees, hears, or reads about IT delivery that’s gone wrong. Recently the nose twitched uncontrollably as the Badger caught up on past material about the 2018 TSB IT migration debacle and assimilated TSB’s independent review by Slaughter & May into their disastrous migration from Lloyds to their own systems. The latter has attracted lots of media comment – see, here, here, here and here, for example.

The Badger’s quietly followed the TSB debacle since it happened, labelling the bank as the ‘The Sillybilly Bank’ for the catalogue of failings. Throughout the last 18 months the Badger has always felt the debacle was unlikely to have just a single root cause. There’s been enough signals to suggest that corporate dynamics, financial pressure, poor planning, poor Go-live decision processes, lack of a solid fallback strategy, IT delivery expertise, and – as picked up in the media – poor common sense, all played a part. Future reports from the UK Banking Regulators will hopefully add more colour into the mix and provide more certainty.

In mulling things over, three impressions have come to the fore in the Badger’s mind. Firstly, that TSB’s parent Banco Sabadell – Europe’s ~36th largest bank and ~ 100th in the world – might be guilty of an ‘arrogance of acquisition, we know best’ attitude. They knew the migration was more complex than anything they’d attempted previously and they were warned in 2015 the migration budget was aggressive. Secondly, that Banco Sabadell appears keen to direct all the responsibility for the debacle onto TSB. This smacks of ‘responsibility denial‘ because Banco Sabadell must have endorsed the migration decisions and it was their own IT arm, SABIS, doing the IT. If they didn’t endorse decisions, then surely their corporate governance failed?  The third impression is that the Abilene Paradox was most likely rampant!

One recent piece of commentary neatly says ‘no one comes out of the TSB debacle smelling of roses’, and ‘the whole sorry episode is an example of how not to behave in an overseas takeover’. It’s hard to disagree. So, here’s a question. Would you trust a bank and its parent where there seems to have been governance, risk management, decision- making, and IT failures and the parent points the finger wholly at its subsidiary? You’ll have your own answer. One thing’s certain. When confidence is lost, customers overcome their lethargy and move elsewhere, which, if you look at the switching statistics, is exactly what TSB’s customers have been doing…