It goes without saying that if you’re the chairman of a parliamentary Select Committee, when you speak, people tend to listen. So when Andrew Tyrie, Chairman of the Treasury Select Committee, issued an explicit warning to the banks earlier this week (as reported in City AM), doubtless ears pricked up across the City.
Mr Tyrie’s point was very simple. He wants to see major banks include greater IT expertise on their boards after a series of high profile glitches have denied customers’ access to their money, prompting the ire of the public and customers alike.
His point is well made. Few things will raise your hackles quicker than being unable to pay a bill or get money from a cash point. And the implicit lesson is that such technical failings do not only cause irritation and distress to customers. They also damage the longer-term reputation of financial institutions. But Mr Tyrie’s warning and advice shouldn’t simply be taken at face value as a warning for the banks. There are important lessons that any service provider can take from his criticisms, made in a letter to the Financial Conduct Authority.
The first of these is that any business is at risk of an IT failure or even cyber incident that can disrupt service delivery and prompt anxiety and frustration amongst customers. The second is the need for preparation in order to effectively deal with a disruption, which by any measure can represent a crisis, and which has long-term reputational consequences.
Prevention is ultimately better than cure, and reputation is fundamentally tied to any organisation’s values and commitment to customer service delivery. Rather than simply waiting until a problem erupts, businesses beyond the banking sector can benefit from both stress-testing their IT infrastructure as well as their crisis responses – and communicating to their customers and supply chain how they’re working to prevent issues occurring.
Then, if a problem occurs, it doesn’t cause the type of disruption Mr Tyrie was referring to.