RBS to shed 2600 jobs 500 roles to be shipped offshore

A very interesting story on Finextra stating that RBS is to shed 2600 jobs and 500 roles are to be shipped offshore.

It's always sad to see job losses on this scale and (if it's correct) the Finextra calculation that Royal Bank of Scotland has cut 22,600 jobs since the crisis began, helps provide an indication of the human cost of the banking crisis. The problem is that while popular anger at senior banking mangers is in many cases justified, most of those who are losing their jobs are generally people far lower down the organisation who had nothing to do with management decisions.

To see the banking crisis and subsequent nationalisation as the cause, though, is to slightly misunderstand what is going on here. I would argue that the banking crisis has forced retail banks to start looking hard at their front office operations and many have realised that, if this was a retail business, (and to a certain degree it is!) this is not necessarily how a retailer would run things. One consolation for the Edinburgh, Glasgow or Newcastle based staff of Royal Bank of Scotland is that retailers like Tesco Personal Finance have seen the opportunity and are setting up operations to challenge the banks directly (see "Tesco Bank creates 1000 customer service jobs"). For the bank, though, this represents a real challenge as Tesco bring skills in customer service, channel management & distribution and especially in customer analytics that the banks may find hard to build themselves.

The other part of this goes beyond the efficiency of a banking distribution channel. I blogged in February on how Shop Direct had gone from thousands of contact centre employees to hundreds (see "Shop direct cut 1,500 jobs - the internet finally takes its toll").

I suspect the same dynamic is at play for the insurance market. The phone based model of Direct Line and Churchill is costly to operate and under threat from both web aggregators and web only insures such as Swiftcover.com. These are both subjects I've blogged on before here, so I won't cover the ground again. It's also the case that the contact centre infrastructure at RBS Insurance was aging and was likely to need an upgrade. Under cost pressure and a shift in consumer channel usage, the bank has had to cut costs dramatically.

I'm not always a fan of offshoring, but the bank does seem to be approaching it sensibly and moving back-office (presumably non-customer facing) roles offshore. This type of move is where offshoring can be very cost effective without generating the hostility and customer service issues that come with moving a call centre.

To a certain extent, though, the back-office offshoring may well have happened anyway. The big theme here is how the very large onshore call centre handling straightforward transactions is contracting as business moves to the web. Call centes will remain very important for problem resolution, for complex interactions, cross-sell and for high value interactions, but it is clear that the banking crisis has brought forward some of the fundamental changes in banking and insurance channels.

Contact Centre impersonation arrives in the UK

I wrote yesterday on the problems the Commonwealth Bank of Australia was having with a phishing attack that caused customers to call a fake contact centre that impersonated the bank's centre and captured their credit card details ("Phishing fraud steps up a new level with fake bank IVR & contact centre").

It now seems that this fraud has reached the UK. The BBC is reporting here that the Bank of Scotland has been targeted by fraudsters who have been able to divert customer calls. There's few details in the BBC report other than that the calls were diverted and that there is a theory that a former contact centre employee may be involved. An inside job does seem a strong possibility, and the infiltration of call centres by organised crime is a real risk. Although it wasn't widely covered, the BBC reported back in 2006 that Strathclyde Police believed that perhaps one in ten call centres had been targeted by organised criminals (article here). Normally, though, crime in contact centres has been opportunistic and carried out by individuals. A typical example was when the Barclays Chairman, Marcus Agius, had his details and money stolen by one of his own employees (covered on the blog in the post "Security, Call Centres and Fraud").

It is a worrying development if organised crime has, well, got itself more organised, and moved up from individuals stealing details to systematic attacks from the inside on the banks' contact centre systems.

Banks criticised by BBC for automated calls

I'm working in San Diego this week, but over the weekend I was sent an interesting story.

The BBC Radio Money Box program has been investigating the use of automated outbound calling by UK banks to chase bad debts.

Some consumers claim that this had led to them receiving up to eight calls a day and Privacy International is arguing that this potentially constitutes harrassment. I can see how this is especially frustrating if the calls are chasing a family member no longer resident at that address.

Lloyds TSB, Natwest/ Royal Bank of Scotland and Halifax Bank of Scotland all use these systems to some degree but say they would not call that often. They say they follow the guidelines laid down by Ofcom, the UK communications regulator and (in the example of Lloyds TSB) they would not expect to call more than perhaps four times and not for more than four days in a row.

To me, this just seems another case of the bank's shooting themselves in the foot. I wrote about the ineffectiveness and decline of outbound calling last week ("Further thoughts on outbound in the UK.....") and while automating the calls might make it cheaper, it hardly makes it more popular. This only adds to thoughts I've had in posts like: "Abbey National fined £30,000 by Ofcom & the future of Outbound in Financial Services" that outbound calling is gets the industry a bad name.

I appreciate fully that banks need to chase bad debts (and some consumers appreciate reminders). However with Ofcom looking to release new, almost certainly tighter, regulations on these outbound systems in June, this may not be the best time for the banks to have poor public relations.


P.S. If any reader requires a guide to call centre outbound technology, this past post provides it: "Outbound, an explanation of the technology"


P.P.S.

From feedback, I realise I probably didn't set out the two big problems with this form of outbound clearly enough.

The first problem was reasonably well stated, that multiple calls to an individual may construe harassment.

The second, slightly more subtle point, is that a phone number doesn't necessarily map to an individual. It's quite easy to think of scenario where two parents have children either living at home or using the home address while they are at university. In these circumstances, potentially informing whoever answers the phone that another family member has a credit problem strikes me as a significant breach of privacy.

Online banking and contact centre

An interesting article on Finextra today with statistics that one third of UK web users bank online. Apparently the most popular sites are Lloyds TSB and Royal Bank of Scotland.

What is interesting for me is that in the UK at least, the web channel and the phone channel are still some way off converging. You might argue that this is natural, as the web (used at home for transactions with lots of detail) and the phone (used anywhere for real time interaction) are different both by function and nature.

I think this rather misses the point. Imagine that one of these web users sees a serious error or a suspicious transaction. Is it likely that they will e-mail and wait for the bank to respond? Or will they pick up the phone to get an instant response?

By contrast, some of the European banks have experimented with web and contact centre integration. Rabobank's youth banking website offers instant messaging (via MSN) or e-mail with 'Yvette' their chatbot. They also offer a skype button on most pages for a free click to call and a link for skype downloads. I've talked about this a little before (in posts like "Skype, contact Centre and Banking") but I do see this as one of the likely trends of the future.

I've yet to see anything equivalent from UK banks, but I suspect that customers pressure will start to force them to offer these services.

Call centre worker gaoled for data theft

An interesting article on Finextra about the recent theft at a Royal Bank of Scotland call centre.

This isn't the first, and certainly won't be the last, example of security breaches from staff. There's been a lot of recent focus on the risks of external attack and how biometrics can help deal with this but the internal threat has been neglected. I've posted on the external attack on Barclays ("Security, Call Centres and Fraud"), when fraudsters stole the identity of their chairman for a credit card application, and there's been some good posts on Finextra (see "Biometrics - what's that all about then?" by Dave Griffiths and "Who's in your Wallet?" by Jarvis Kandik both last month).

In fact, inside threats are perhaps as serious as the risk of external attack. In 2006 HSBC lost £233,000 after it's Indian call centre suffered inside attack (here for the BBC report). Last year the BBC also reported how HSBC and HBoS had been targeted by an organised gang which both penetrated the banks and laundered the proceeds of their crimes.

An internal threat is nothing new - fraud from dishonest employees is something that banks have had to deal with almost from the start of banking. What is new is the level of the threat and its organisation. As an example, Strathclyde Police (who cover the west of Scotland where many call centres are located) believe that organised gangs have infiltrated perhaps one in ten of the call centres there (full report here).

In the end, as I've argued with biometrics, the criminals will be beaten by process, not technology point solutions. If the defences against external attack are strong, then criminals will seek to get on the inside. The correct response is not to strengthen the exterior with biometrics (though I'm not sure biometrics do strengthen it), but instead to make sure that staff are vetted, exceptions or unusual activity is identified and monitored and good management is in place.

Process is not terribly exciting, but it will be the element that determines whether technology defeats criminals or not.