The BBC recently published an interesting article “Why banks are likely to face more software glitches in 2013”. This is something that we should all be concerned about. As payments become more of a commodity, we expect availability and demand convenience.
We all struggle to manage our finances, make sure we pay our bills on time, only to be let down by the bank and a software glitch. Remember the failure of the Faster Payments system at Lloyds Banking Group? Today payments are as important to us as our
Gas and Electricity supplies. The major difference is that the testing requirements for Gas and Electricity appliances are regulated. You would not invite a gas fitter into your house who was not Corgi registered.
So why do banks have these issues? One answer is that the software used today is so complex. When new functions are coded banks lack the ability to ensure that nothing will go wrong with the existing system. This was seen last year with the software upgrade
which effected millions of customers at RBS, NatWest and Ulster Bank.
The problem of software glitches could also be related to the funding of these complex systems. Industry analysts at Ovum have predicted growth of 3.4% in the IT spend of retail banks around the world in 2013. This is in-line with the prediction of Celent
released last month. However read further and Celent predicted that 77.1% of investment in IT in 2013 will go towards maintenance. This shows that Banks are spending more to do nothing than they are investing in new technology. The impact of this is that
they have to manage change in legacy systems where the risk of software glitches constantly increases.
Banks are unable to invest in new technology partly due to budget constraints, but also due to the fact that no single person or even group of people can ever fully understand the end to end structure. It is time that banks got back control of their payment
systems in order to enable them to migrate to new systems which meet their requirements. This would minimize the need for unique customisations and in turn help to reduce to the high maintenance costs.
The best way for banks to get back control is to simulate or model the existing system. They will then be able to understand the functionality offered today, and therefore what is required in a new system. This simulation can then be used to asses new
systems and understand how new functionality can be offered without impacting current services.
Banks will then be able to select a new system with confidence and reduce maintenance fees, the risk of software glitches while improving customer satisfaction.