Banking on Disaster

Credit Cards

After 10 days TSB Bank are still having problems with their computer systems, but what does this mean for those who rely on the bank to conduct their business?

Even a look on TSB’s website is enough to know that things still aren’t right, phrases such as ‘some customers may still experience issues logging in’ are commonplace but if you’re a business trying to pay staff, your suppliers, or even just to check you are being paid it simply isn’t good enough.

In the short term there is very little anyone can do, even TSB can’t get it right just yet. With this in mind however, over the longer term, should you be spreading the risk over more than one bank?

System redundancy, that is keeping a solution on standby, just in case of failure is a sensible option but when it comes to banking it’s a costly option. TSB isn’t alone in its computer issues, nearly every big bank uses legacy systems which have not changed since the 70’s; much of it based on languages like Unix and Cobol which are very stable but there is a serious lack of programmers in the UK right now to support these.

Essentially, every business takes a risk, but it has to be a carefully calculated one; either spread your funds around a few unconnected institutions or stick with one and run the risk. But either way you should always have a back-up plan, maybe short-term credit lines which you could use to tide over any hiccup in payment processing; alternative deposit accounts so you can still receive payments are also a good idea.

Every business should have a ‘disaster recovery’ plan, this sounds complicated but actually can be as simple as flow charts, bullet points and contact details for the most important parts of your business. For those caught up in the TSB debacle it is important to get things straight first ensure that your accounts are where you left them ten days ago, record what you’ve had to do to cope over the period you were without access to your bank; then formally complain but do ensure that you collate all your details first.

It is important you use the word ‘complaint’ and that you are clear what you’re complaining about, costs you have incurred and the extra time you had to spend on resolving your issues. Be clear on an outcome and if you want monetary compensation, how much and why; always record who you spoke to, date and time along with any reference numbers, you will need these should you have to refer the complaint to the Financial Ombudsman Service.    

30th April 2018