Multiple High Street banks recently experienced App outages impacting customer usage of their services. Making matters worse, the Parliament Treasury Committee issued a report sharing that:
“Nine of the top banks and building societies operating in the UK accumulated at least 803 hours, the equivalent of more than 33 days, of unplanned tech and systems outages in the last two years.”
Access to bank services are vital for consumers and businesses. The impact goes beyond simple inconveniences. Yet it appears that old banks have struggled for years to address the shortcomings of their services.
Tom Hewson, CEO at RedCompass Labs, a global payments modernization firm, said that sending payments may seem simple but there are many variations in a single transfer from bank to bank.
“…we expect that when these payments are domestic, they are instant, free and with zero outages. While people’s frustrations with banks’ regular outages are completely understandable, payment systems are incredibly complex and more fragile than we are willing to admit or the regulator be willing to accept,” said Hewson.
He explains that fixing the problem is not a simple task. Meanwhile, banks are expected to deliver flawless service 24/7/365.
“Banks are being held back by increasing costs, a lack of deep payments expertise, and procurement and information security processes that were designed almost 20 years ago after the 2008 financial crises and wholly unsuited to exploiting new technology such as AI that can manage these levels of complexity when assisting AI-enabled payment experts,” Hewson stated, adding that banking is a “tricky balancing act” great when going well but frequently hitting a bump and then the entire system goes down.
“That’s why banks tend to play it safe. But with mounting scrutiny from regulators and governments, hundreds of thousands of frustrated customers, and millions in compensation payouts, the message is clear: business as usual isn’t an option,” he advised. “They need to invest more in both payments expertise and technological innovations to enable them to deliver more, faster.”
Hewson believes that AI, trained on data and used by the right people, is the only real solution banks can leverage to better automate and speed up payment and transfer modernization.