IBS Journal May 2017


EDITOR’S NOTE AGEING MAINFRAME OR SHINY NEW DIGITAL PLATFORM?


WHEN IT COMES TO JUMPING TO A CHALLENGER OR STICKING WITH AN INCUMBENT BANK, IS IT A CASE OF ‘BETTER THE DEVIL YOU KNOW’?


05


Senior Editor Scott Thompson Scott.Thompson@ibsintelligence.com


challenger bank, Secco, recently ran a Twitter poll asking: Would you feel safer knowing your bank runs on a reliable but ageing mainframe or a new but unproven digital platform?


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There were 200 votes, with digital edging out mainframe by 53% to 47%. Gledhill commented that his Twitter followers are FinTech fans, so he was surprised to see nearly half taking comfort in legacy (try the same poll on the much less hip LinkedIn and I reckon mainframe would romp home).


I have a confession to make. I was one of those who voted for the status quo. That’s not to say I’m a challenger bank hater. Far from it. I’m a big fan of several new entrants, including Monzo, OakNorth, N26, Starling and Atom. I have a Monzo prepaid Mastercard debit card, but when it comes to what’s under the bonnet, I would rather remain with Nationwide Building Society (having been a customer for five years) than place all my bets with a cool upstart.


During March, mobile-only venture, Monzo, was hit by technical issues two times in one week. It experienced problems with payments not displaying correctly in its app and tweeted: ‘We’re experiencing some issues with the in-app display and are working to fix it. Your card will work as normal’.


A few days earlier, cardholders were unable to make


hris Gledhill, Co-founder and CEO at UK


payments or send money, due to one of its suppliers running “an unexpected large migration”. The issue also affected fellow FinTechs, Revolut and Loot. “Your money is safe and this is only a temporary issue,” Monzo assured customers. “We will be conducting a full review of how and why this happened and what can be done, both us and the supplier, to ensure this does not happen again.” It has since emerged that it is to ditch its third-party card processor and move transactions in-house.


Around this time, fellow digital-only new entrant, Tide Bank, was struggling with mobile app problems as a result of an unspecified EU technical infrastructure issue at GoDaddy. Customers of the registrar and web hosting business complained on social media that their domains were disappearing from DNS (sample tweet: ‘That moment when you can’t even login into your #godaddy account. First the #awsoutage now #godaddyoutage – Is the internet dying?’)


Of course, incumbent banks are no strangers to IT glitches causing chaos for customers. Indeed, some of them have turned it into an art form. It was one of the main reasons I ditched the hapless NatWest (having been with them for the best part of 20 years) and switched to Nationwide. The way forward has to be a modern core and an open and flexible architecture. But as things stand, I like Nationwide; their mobile and online banking offerings are excellent and IT glitches are few and far between. So why jump ship?


www.ibsintelligence.com


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