James Moore: Customer inertia: the only thing about banks that isn’t broken


Banks’ IT systems are “creaking” and it is because consumers want things like mobile phone banking services.

So said Anthony Browne, head of the British Bankers’ Association, in a radio interview. It is, of course, his members that have been pushing these services, the widespread take-up of which has enabled them to close thousands of costly branches.

What is true (as he argued) is that customers expectations have changed since the days when cheques were shipped around the country on the backs of lorries – and IT has been the driver.


But planning for technological change is something on which forward-looking companies and industries spend billions of pounds and man hours. Unfortunately, forward thinking is not a term that could ever be applied to Britain’s big four banks.

Faced with the choice of spending money on keeping their IT if not at the cutting edge then at least more or less ship-shape – or spending money on investment bankers to find deals – the latter won every time. And thousands of IT staff bit the dust when finance directors needed to produce savings for the City to drool over as they sought to justify those deals.

Royal Bank of Scotland’s latest IT outage is probably the result of that sort of thinking, but it’s hardly alone in having systems that are held together with sticking plaster and a few remaining old hands in the IT department to keep the eHeathRobinson affairs running.

Luckily for the banks, they’re not the only ones governed by inertia. Their customers are too, despite all those demands that they are so found of making. The logical answer for them after this, the third IT outage at RBS in the space of four years, is get out. Tootle down to the local Metro Bank – or to something like Atom, if they’re happy to conduct most of their transactions online. Or to one of the other banks whose systems are a little less legacy.

But even with so called seven-day switching, most won’t. RBS might endure a few departures, particularly among those most affected by the current mess. Most of its customers, though, are likely to stay put. They’ll probably stay put after the next outage too. And the odds suggest that there will be a next outage.

The penny hasn’t dropped at the CMA over Poundland

For the first time, Poundland has pushed more than a billion of the currency units for which it is named through its tills.

Its life is  apparently getting easier too, albeit briefly. Deflation should have eased the process of hitting its sacred price point.

Not that there’s any complacency apparent at its cut-price HQ. A further 40 new stores are scheduled to open over the next six months, 60 over the next year, by which time inflation will be back and the hunt will be on for ever-cheaper suppliers to keep the show on the road.

Is it possible to sell dust? Speak to Poundland’s marketing department. They might be called upon to find a way.

Just not for a while, given that inflation is only expected to make a muted return when it does come back.

There’ll be a bit of inflation across the Poundland estate if the Competition and Markets Authority lets it buy 99p Stores (a review is in phase two with the decision due in October). One does rather wonder if the CMA has quite got this one right.

Protecting the punter from a 1p price rise doesn’t seem to be the best use of its time, and Poundland is exuding confidence that its arguments will win the day.

There are more than a few pounds riding upon their doing so. Growth is slowing, coinciding with consumers having more pounds in their pockets. Sales at stores open at least a year are actually down.

One way to maintain margins and keep the model of wedding your business to an artificial price point is to buy rivals, strip out costs and exploit revenue synergies.

So there might be a can of coke cracked if the CMA says yay – particularly in the marketing department. It might be a few months more before they have to start exploring dust futures.


After giving birth to Playtech, hard labour doesn’t faze him

“Its probably easier to give birth to a 6lb baby rather than a 9lb baby. But you still end up with a baby.”

That was the response of one gambling industry expert when I asked whether they thought it wouldn’t have been better for Teddy Sagi – the Israeli billionaire, founder and biggest shareholder in the gambling technology operator Playtech – to have reduced his shareholding.

The chance to do this was presented by the cash call instituted by the company to help fund the acquisition of the troubled trading platform Plus500, a deal on which Playtech appears to be closing in.

But Mr Sagi, through his investment vehicle, is taking up his full allocation of new shares. As my source opined, it might not matter all that much whether he has 33, 25 or even 20 per cent. He is still there.

Playtech does appear to have grown up a bit of late all the same. A down-in-the- dumps Plus500 certainly looks to be a good deal, and not just because it’s cheap. It isn’t a “related party transaction”, for which read a company linked to Mr Sagi.

Still Playtech will still have a nice war chest (there’s some debt being raised too) once the dust has settled and Plus500 is in the fold. How it is deployed will say a lot about whether it is truly finished with its romper suits.


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