A new compliance challenge or a hidden opportunity?
UK senior bank employees at risk of jail sentences for banking negligence and failures dominated the headlines out of the Report of the Parliamentary Commission on Banking Standards.
Hidden in the report was an equally populist idea: make bank account numbers portable in exactly the same way as mobile phone numbers.
Perhaps not as colourful or playing to the mob as much as lock up the bankers, but this concept goes to the heart of how UK Government wants to revive the UK retail banking sector.
But what are the operational and technical challenges involved and how can banks, already stretched to comply with other urgent measures, respond effectively and in ways that don’t distract them from their continuing focus on customer service and supporting
the economic recovery?
Technology is perhaps the least of the problems facing banks attempting number portability. While it is true core banking systems are built around pretty restrictive data models and account numbers may be duplicated between banks, these obstacles can be
overcome using BPM technology that can provide a translation layer between a customer’s personal account number and their new bank. This means that for the customer they will appear to have the same account number on their cards, statements and documents while
the new bank may actually create an internal account number that is completely different.
The other technical challenge lies in how not all accounts are the same and each comes with many different features and a sackful of special benefits and services. Again a BPM platform could take care of ensuring an account moving from Lloyds to HSBC captured
the required information from the customer as part of the portability process to ensure that any extra/different data was captured to align with the HSBC account structure.
Moreover, the profile of a customer when viewed by two separate banks may actually generate lots of hurdles to portability. It is rare that a customer has only a simple current account with their bank. Over the last decade the push to turn banks from trusted
custodians of our money to effectively financial product sales centres means many customers have been sold overdraft facilities, insurances, limits on daily cash withdrawals as well as preferential rates on other products such as mortgages and credit cards.
The intertwining of financial products could actually be the biggest hurdle to portability and is probably beyond the capability of technology on its own to solve.
So to a great extent, if not properly done, the value of account number portability to improving customer service could be a big red herring, resulting in more confusion and complications for banks and customers alike.
Therefore the more effective route to delivering the changes in customer service required by the Tyrie report may lie in how banks improve their switching processes and effectively leverage customer data to streamline customer service. If more banks could
increase the efficiency of their switching processes, this will significantly speed up customer onboarding of switching account holders, while cutting down costs. Moreover, customers will be able to benefit from richer choice of financial providers and improved
This could be achieved by leveraging a unified rule-based BPM platform that allows banks to take the initial customer request, break it down into parallel tasks and processes, and trigger a series of next-best-actions that can help banks meet or exceed the
promise to the customer.
Ideally if all the banks were to invest in increasing the efficiency and effectiveness of their customer servicing and product suitability capabilities, then even the need for account switching could be reduced dramatically.
In this scenario CRM systems will be more closely aligned to the organisation’s marketing objectives. This will allow banks to guide customer facing staff through the next-best-actions required to ensure that customers are always offered the best financial
product for them, at the right time and for the right reasons. This will enable financial organisations to dramatically improve their services. After all, it would be nice to think that customers would stay loyal to their banks for positive reasons rather
than wanting to avoid the hassle and upset of account switching.