A long and hearty slow clap was aimed in the direction of Royal Bank of Scotland this morning: the lender is busily apologising to customers after its online and card payment services were down for more than five hours last night – perfectly timed to coincide with the tail-end of the busiest online shopping day of the year.
By all accounts, the glitch caused pandemonium on the nation’s high streets: there are reports of trolleys being abandoned at tills and motorists being forced to leave their cars at petrol stations, while rail passengers were left stranded and red-faced restaurant diners were (probably) made to roll their sleeves up to do the washing up after their cards were declined. Worst of all, Jeff Bezos’ hard work getting Amazon’s name on the front pages of papers just in time for Cyber Monday was wasted. The humanity.
On Twitter, the bank was in maximum sackcloth-and-ash mode:
We're aware of some technical issues and are working hard to fix them. Sorry and thanks for your patience— RBS Help (@RBS_Help) December 2, 2013
We are very sorry for the issues that have affected customers tonight.— RBS Group (@RBSGroup) December 2, 2013
If customers have been left out of pocket as a result of these problems, we will put this right.— RBS Group (@RBSGroup) December 2, 2013
We would like to apologise to our customers. If anyone has been left out of pocket as a result of these problems, we will put this right.— RBS Group (@RBSGroup) December 3, 2013
Doesn’t look good, does it? There are still reports of customers experiencing problems - and it isn’t the first time this has happened. 18 months ago, customers of RBS, NatWest and Ulster banks couldn’t access their accounts for several days – weeks in some cases. At the time, then-CEO Stephen Hester waived his bonus (unlikely, really, to have helped much – but a nice gesture nonetheless), and the bank put aside £125m to compensate customers. Ouch.
This comes at a particularly sensitive time for the bank. Lloyds, its taxpayer-owned peer, is already several lengths ahead of it in the race to reprivatise. RBS, meanwhile, has spent the past few months battling various disasters, the most recent of which was an accusation by government adviser Lawrence Tomlinson it had been leaning on solvent businesses by sending them to a ‘hit squad’ (an accusation which the bank subsequently denied).
And by the looks of a report from the Bank of England, it’s already having to fight to keep customers: according to figures published this morning, bank customers are pulling their money out of lenders at a record rate. In the past year, savers have drawn £23bn out of their accounts. That’s about £900 per household.
In the year to October, cash in savings accounts and ISAs fell by 4.7%, while the amount families had in their current accounts rose by 11.2% - the biggest shift since records began in the 1970s. In other words, people need more liquidity than ever before.
Admittedly, the effect is that people are spending, thereby helping to restart the economy. But if they don’t have savings, banks have less capital just as customers need loans. Which brings us back to exactly where we were before….