Elsewhere

Applying moral philosophy to banking might not be the wisest of moves. The Marxists in the Labour Party would be insisting that the state must do it all, while the Aquinas wing of Christianity would possibly say the usurers will burn in Hell for all eternity. However, there is an interesting part of Marx that we can apply – the mode of production determines social relations. Further, that when the mode changes, so should the relations.

In other words, as TSB’s latest travails show, it might be time to put the computing industry in charge of retail banking. Or, to be less ambitious, perhaps, to actually recognise UK retail banking for what it is these days – a branch of the computing and tech industries, not something really to be run by bankers any more.

20 comments on “Elsewhere

  1. Putting a bunch of Spanish IT people in charge was rather a flop, wasn’t it?

    The problem is – and this is just a guess – that IT people are overwhelmingly not fit to run anything that needs to interface with Joe Soap, and that bankers – to take an example – haven’t a clue about IT. So you end up with IT amateurs in charge of anti-social nerds. And this is in a context where mistakes matter, unlike large parts of the IT world where it appears to be accepted that you can mildly defraud your customers by releasing stuff that doesn’t work properly.

    Maybe what IT needs is a Toyota.

  2. The Spanish seem to have rescued Lloyds from the Labour induced trauma. Meanwhile RBS, those Scotch people, are still wandering around in baskets

  3. Were the TSB IT crowd Spanish? Or is this just another case where Scottish people refuse to admit their uselessness?

  4. I think there is a good case that retail banking ought to come free with your mobile phone in the same way that in some places long distance phone calls come free with your cable TV plan.

    It certainly seems that the mobile phone companies are doing a vastly better job of it in many places.

  5. dearieme is right. IT people would create IT people’s vision of what banking should be. Probably wouldn’t even make IT people happy.

    ‘it might be time to put the computing industry in charge of retail banking’

    More harm than good would come of it.

  6. IT fuckups in Banking tend to be the result of (a) getting rid of the experienced old boys and outsourcing it somewhere cheaper, who then fuck it all up in a colossal public scandal, or (b) a new, large project which is very difficult anyway but isn’t helped by the people in charge not really knowing anything about the systems they are creating.

    I think the TSB one was the result of replacing an old, trusted system with a new, “state of the art” one. Those old systems in banks are still there for a reason, because they have been handling mega volume transactional traffic for decades and every bug has been found and fixed. A new “state of the art” system just introduces a whole new set of problems. Getting that sort of thing right is not easy.

  7. Rob nails it. Banking IT consists (largely) of ancient COBOL systems built on top of antique database technology, all nailed together with a scattering of MQ and undocumented JCL that no-one understands any longer.

    What’s really needed is to throw it all away and rebuild from scratch, but no-one has the balls (or the budget) to do it. (I understand DB may be trying to do this, but my info is a couple of years out of date.)

    At some point in the next couple of years, a major bank will experience an irretrievable failure in its IT systems, which should be ‘interesting’ (if you can watch from a safe distance).

  8. ‘getting rid of the experienced old boys and outsourcing it somewhere cheaper’

    Thus Gamecock retired. I ran a cost accounting system for a major corporation. They replaced it with SAP. They had zero interest in retaining me. They pretty much told me to my face that I made too much money.

    I did check back in occasionally to hear the disaster stories.

  9. SMFS – why should retail banking be free? Someone somewhere has to pay the bills, do you want higher mobile phone charges (considerably higher maybe) in order to get free retail banking? Or how about adding the charges onto personal bank accounts in order to have free retail banking?

    Who do you want to pay for retail banking?

  10. smfs,

    The MNO were having legacy problems with their billing systems back in the 2000s and it only likely to have got worse. They would face exactly the same problems as TSB, if not worse as they tried to do 2 jobs.

  11. “JCL”: a curse from the distant past. I can remember people passing around sets of punched cards of JCL – nobody understood it, but those punched cards were known to do the trick.

  12. Rob is correct: a mate works in IT for Nationwide BS, he’s one of the old school programmers they have to keep on board (at vast expense) because he’s one of the few people left who can sort out the creaking systems. Lots of the other work has been outsourced to India, they have a constant stream of Indians sent over on secondment. Great for the office cricket team, what is does for the stability of the IT systems is more questionable. The point about management not having a fucking clue whats actually happening at programming level is also one of his bugbears.

  13. Jim, true about management cluelessness. They have no idea what anyone does, so young Indian = old white man.

    Additionally, they don’t have to splain it. Something goes wrong, management reports young Indian is working on it. No one knows old white man could have prevented it from happening in the first place. Management appears to be doing a good job, they’ve got Kirit on it. Kirit does a good job, and it appears everything is fine.

    No one knows any better.

  14. Martin – “why should retail banking be free? Someone somewhere has to pay the bills, do you want higher mobile phone charges (considerably higher maybe) in order to get free retail banking? Or how about adding the charges onto personal bank accounts in order to have free retail banking?”

    You have misunderstood what I meant by free – and I was unclear. If you buy a mobile phone in some countries, you get some free social media thrown in. These days, those social media apps often also offer banking services. For free. If you use the banking services I assume you have to pay. One way or the other.

  15. Who pays for retail banking? The banks can pay for it with the interest from all my money they are looking after.

    The way to replace any IT system is one function at a time. Get one small subcomponent working in parallel with the old system and squash the bugs out of it until you can turn off the small subcomponent in the old system, then move to another small subcomponent. Nobody with any experience of any sort of engineering, whether it be bricklaying or computing, would expect to be able to whip the old construction out of the way and stuff in the new system in toto.

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