In the midst of TSB's ongoing online banking meltdown, Charlie shares his thoughts on how the organisation has been managing the communications aspect of the incident.
Last night I was doing what I always tell the readers of this bulletin to do and was looking at how TSB bank have been responding to the failed upgrade of their main banking platform. After reading about the crisis, I thought I would share my thoughts on how they have been managing the communications on the incident.
The basic story is that during their split from Lloyd’s Banking Group, TSB had to upgrade their main banking platform. The upgrade went wrong, which left customers unable to see their accounts, access their money and in a number of cases, they were able to see and access other customer accounts. The incident is now in its eighth day, with customers still not being able to access their accounts. TSB have yet to get to the root of the issue and recent communications say it might be next week before customers can access their bank accounts.
Below are some of my thoughts on TSB's communications during the incident:
1. If you read some of the papers by Timothy Coombe on crisis communications, he identifies five strategies which can be used by organisations during a crisis. We remember them through the acronym DALEK. The strategies are Deny, Accept responsibility, Lessen the offensiveness, Excuse and Keep quiet. In this incident, TSB have gone for the ‘lessen the offensiveness’ strategy. They have said they will make sure that none of their customers are out of pocket and have already compensated the first customer. “Claire McAdam and her partner Ian Roddie from Glasgow have been paid £40 compensation after McAdam was unable to access her bank account online or make a bank transfer from her account to repay money she owed on a credit card”. They have also said they will waive all overdraft fees, which will cost them approximately £10m, and they have upped the interest paid on current accounts to 5%. I am not sure whether it has been organised by TSB, but HMRC have said they will not penalise companies who have not been able to pay tax or VAT, as a result of the incident.
Perhaps TSB didn’t have a lot of choice as to which strategy they used, but at least they have tried to lessen the impact on their customers. This strategy will only work in the long term if they are generous with their compensation. If they are mean with their compensation, this will lead to customers complaining and the profile of the incident will be raised again in the media, leading to further adverse comments and loss of reputation. When I’m delivering training, I always say pay generous compensation now, as you will pay much more in the long term once lawyers get involved.
2. One of the crisis communication strategies they could have deployed is ‘deny’. This is where the organisation either denies the accusation, which wasn’t really possible in this case, or shifts the blame onto someone else. In this event, it appears TSB's parent company, Sabadell Group in Spain, were responsible for carrying out the IT upgrade and could be blamed for failing to implement the upgrade correctly. Blaming someone else at the beginning of an incident is a bad strategy to use, especially in this instance, as TSB agreed to the upgrade and Sabadell is part of their group. Although communications have hinted at the blame of their parent company, they have not used this as a media strategy.
3. When an incident is seemingly unending, you have to be seen to be taking action, as this reassures your customers you are getting a handle on the situation. You also need to demonstrate action is being taken which compliments your communications. In this case, CEO Paul Pester brought in IBM, took personal responsibility for management to rectify the issue and set a deadline to sort the incident out by. After their racist incident a couple of weeks ago, Starbucks complimented their communications stating that racism was completely unacceptable, by closing all branches in the USA for an afternoon and giving staff diversity training. This was a very visible way to demonstrate their commitment and show their statements were not just words, but were followed by actions and in an incident this is very important.
4. Over the last few years, banks have tried to save money by getting their customers to self-service their accounts through the internet and apps. This has allowed them to close branches and reduce the number of staff employed in call centres. However, problems arise when they have an incident such as the TSB crisis, where there is a huge demand for individual contact with customers and customer communication channels become overloaded. This leads to customers facing long waits on the phone, disconnections and further adverse news headlines for the bank. Banks and other organisations need to think about how they can upscale their customer communications during an incident. The communication through TSB's website is detailed, but in this case customers need individual help, as well as general information. It is not as easy as hiring a load of temps and putting them on the phones, as they need to be trained to understand the systems and may not meet regulatory requirements for training and security. On top of this, talking to someone who is not very competent in helping them will further alienate customers. During their contingency planning, organisations need to think about how they will scale up their customer service offering in an incident where there is a high demand for individual customer service.
5. It is an obvious point, but do not get your CEO to tweet that the incident is resolved, when there are still issues, as TSB's CEO did at 4am on Wednesday. Double check this kind of information, as it can cause further anger from customers and make the company look incompetent.
In the end, like all incidents, this is going to cost TSB lots of money in compensation, management time and the impact on other projects and initiatives. Incidents set organisations back and they have to spend lots of time and employee efforts getting back to the level they were before the incident. Of course, TSB will lose some customers, but Ulster Bank had a similar incident in 2012 and retained most of the customers they had prior to the event. The public have short memories; how many times have we said we are never going to fly using X airline again, only to find ourselves on the same airline three months later? TSB will weather this storm, but its ambition to be seen as a major player and a challenger bank in the UK market will be set back.