Money Watch – Personal Finance Blog

photo credit: ninasaurusrex

For 2 hours this afternoon, customers of HSBC and First Direct found themselves unable to access online banking, withdraw money from ATMs or use their debit cards.

A “mainframe outage” caused this near-complete loss of service, and customers were quick to vent their anger using social media.

Today’s events provided a good case study in reputation management and should also provide some lessons for the future

Reputation Management

At around 14.45 this afternoon, tweets started to appear suggesting that HSBC had problems. Whilst some have suggested that the problems began earlier, this is when the rapid flood of complaints began on Twitter.

It wasn’t until more than hour later that the HSBC press office first commented on the problem. By that point, the number of complaints on Twitter was impossible to keep up with.

Whilst an hour may not seem a long time, in today’s connected society it is a lifetime. It only takes a second or two for disgruntled customers to vent their anger about just about anything to thousands of their connections, so reputation management should begin pretty much straight away.

Given the tools at their disposal, bank press offices should be able to identify negative sentiment about their brand almost instantly, and have a procedure in place for responding. Even having a Twitter client such as Tweetdeck open with a search on “HSBC” would have alerted them to the problem and given them a chance to respond quickly.

Even if the initial message is just that they’ve been made aware of an issue and they’re investigating then that’s better than radio silence.

First Direct were also affected by this problem, but given the number of clients compared to HSBC the reaction on Twitter wasn’t as strong. Whilst First Direct took the time to respond to a Tweet I sent them, again there was little communication telling clients what was going on.

By 17.00 the problem had been resolved, but plenty of damage had been done to their brand.

Backup Plan

In this day and age it seems unusual that HSBC’s online banking, ATMs and card payments would all be subject to the same single point of failure. Whilst we don’t know the precise nature of the fault that caused the outage, you’d think that there would be some independence between the systems so that the others would continue working if one went down.

But it’s not just HSBC that should be looking at their back up plans. The comments of customers affected by this outage show just how vital they find these services (especially as beer o’clock approached on a Friday afternoon!).

Whilst many were moaning about being unable to get cash out for the weekend, and some were annoyed by the funny looks they got from others in the queue when their cards were declined at the supermarket till, other customers would have understandably worried about bills not getting paid on time.

HSBC have stated that all payments have now been processed and that they’ll make sure that no customers are impacted financially, but how many of us have a back up plan when it comes to ensuring we have cash available?

Some have suggested that we make sure we’re always carrying around more than one debit card, but that might be be practical for many.

Also, as we begin to use our phones for more and more payments, are we just introducing yet another possible single point of failure, and will we have to continue carrying cards around in case something happens to our phones?

Perhaps today’s events were one of the best adverts for having some cash in our pockets, just in case the technology that we normally rely on lets us down.