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RBS's technology evolution

A lot has changed in the 35 years since Kevin Brown started his career at RBS. The senior executive at RBS International Banking tells The Banker that as telecommunications have evolved, so have customers’ expectations.
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RBS's technology evolution

Smartphones, online connectivity and 24/7 payments are so commonplace in the UK that it takes an object from a bygone era to show just how far banking technology has come. Kevin Brown, a managing director at RBS International Banking, has one such memento: a tone pad. Because it seems so antiquated, he has to explain its purpose.

It is from 1986 and NatWest’s launch of phone banking. Although Gordon Gekko in the movie Wall Street had a mobile phone at this time, albeit it a brick-sized one, the bank’s customers were still using landlines, and many did not have tone-dial phones and were still wheeling their fingers around a dial to place a call. The bank issued its customers with tone pads, which were held over the receiver so numbers could be pressed to produce a corresponding tone for the service to capture on the other end.

“At the time we toyed with using voice recognition. We had some good voice recognition services, but because of the size of the data to carry the voiceprint, the links were not good enough – we did not have broadband – it would have been too slow. And getting every customer to record their voice would have been unfeasible, so we opted for [personal identification number] technology. This shows you just how far we have since come,” says Mr Brown. 

This is just one of the milestones in Mr Brown’s career at RBS, which spans 35 years. If all goes according to plan, he will leave RBS in April to begin a portfolio career of advisory roles and non-executive board positions.

Career high

He started his career at NatWest, which was acquired by RBS Group in 2000, and he later played a key role in another of RBS’s major acquisitions. He led the team that split ABN Amro’s transaction banking business into three parts – to share among the consortium of bidders – and integrated RBS’s part into its global transaction services business.

Another significant milestone for Mr Brown was the introduction of Faster Payments – a UK banking initiative to reduce payment times between customer accounts at different banks. Mr Brown, through his involvement with various industry bodies, played a key role in its development.

“The advent of Faster Payments raised the expectations of customers to have a high availability of services 24/7,” says Mr Brown. “It also means we have to respond to any customer issues very quickly. That is something we are working hard to do on a continual basis and working on new ways of responding quickly.”

Online world

Far removed from the launch of phone banking, the technology is now vastly different: “We are increasingly in an online world. Therefore, if you look at any type of payment activity you are relying on online technology to support it,” says Mr Brown.

Being part of the online world also means that news of any customer issue spreads quickly. “Within 15 minutes it’ll be trending on Twitter,” he says.

This is something RBS Group has had to deal with on two occasions in recent months. In June 2012, a software upgrade went wrong and customers’ account balances were not updated properly, causing a huge backlog of payment processing. And in December 2013 another technical glitch meant that customers were unable to use their payment cards, a situation the bank’s chief executive Ross McEwan described as “unacceptable”.

The pressure on UK banks has increased because of the Faster Payments system, which runs 24 hours a day, seven days a week. Unlike other European countries where consumers don’t expect to make payments on the weekend, the UK does not have the same kind of systems maintenance window.

When asked if there are some parts of the legacy payments infrastructure that the bank is afraid to touch, Mr Brown says: “We have done it once with Faster Payments. There was a huge amount of work in re-engineering all of our accounting and platforms to cope with 24/7 payments.”

Does this mean that customers are now taking so much for granted – especially considering the evolution since the tone pad – and expecting too much from their banks? “The world has changed and expectations have changed. We should not be dampening expectations – we should be continually raising the game,” says Mr Brown. 

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