Forget AI, banks need to get rid of legacy systems to stand a chance

banks AI
Image credit: ViDi Studio / Shutterstock.com

News, hype and puff about banks saving billions using AI and chatbots and who knows what is all very well. But they will not stand a chance against FinTech start-ups crowding into the profitable bits of the market unless they fix their basic problems.

There are endless stories about the complexity and difficulty of signing up to traditional banks. Our own experience, several years ago, was no exception. We were told that we would need to spend one hour of our time and all would be well, our account would be up and running. We spent about two months.

Meanwhile online, mobile first, banks require about 10 minutes.

Trying to close accounts with banks can be as tricky. Our own experience was that this, too, took months to achieve. Emails went missing, people were never where they said they would be (most of the people we were dealing with at banks were part time, no prizes for guessing why) and finally we had to send a physical letter to our physical bank to say we wanted to close our accounts. This was after a visit to the physical bank to ask how we should get it done. Finally we received an email, the most informal we have ever received from an institution, saying, ‘hello, we have closed the account you asked us to close’.

Except it turns out that the account we closed was not actually closed. Or was it?

We recently started getting statements – through the post obviously (we turned off paper banking years ago) – with ‘service charges’ on them and random balances and even more random interest rates.

This time we knew what we had to do. We knew how to deal with banks now. We went to the physical branch. We showed them the statements. We said ‘we closed our accounts last year, why are we getting statements?’ They said they didn’t know. They looked up our company name, our own name, our address, our post code, the name of our dog. They found no products under any of them.

‘Why, then, are we getting statements?’ we asked.

‘We don’t know’ they said.

‘Can you stop sending us statements please’ we said.

‘Um’ they said, ‘we don’t know, you don’t have an account.’

‘Exactly’ we said. ‘So please stop sending us statements’.

‘We can’t’ they said, ‘because we have no way of stopping something that does not exist’.

‘What should we do about these statements, that do after all, tell us we owe you money, albeit random amounts of it.’

‘We don’t know’ they said.

‘Shall we just rip them up?’ we said.

‘That would probably be best’ they said.

This is just one of many, many stories of banking technology being old, yet out of control (don’t get us started on some of the online banking systems still out there).

Honestly, until banks get rid of legacy systems and glitches like this, they simply do not have a hope when it comes to competing with FinTech start ups, however much money chatbots might save them.

Imagine having the conversation above with a chatbot.

It would probably explode.

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