Let’s be honest, banks, and especially British banks, are not having a great time right now. I doubt that Bob Diamond will be the last casualty of the LIBOR manipulation affair. Stephen Hester has his own problems, and I would imagine that whether he takes a bonus or not will be the last thing on his mind right now.
There is often little that can be done to correct problems of the past. No use crying over spilt milk, as the saying goes. But who clears up the mess when a BACS tape is wrongly processed? Who refunds bank charges when a software upgrade puts batch processing behind and wages don’t make it to customers’ accounts? When a regulator rules that a regulated product was mis-sold, who organises the refunds? Operations of course!
A great example of this is PPI. Banks were ruled to have sold inappropriate payment protection insurance policies alongside loans and other forms of credit. Now, certain UK banks have created and staffed specific divisions to handle the PPI complaints. A fundamentally simple process – read complaint, check PPI was sold, evaluate whether compensation due, calculate and issue refund, write to customer – is consuming hundreds of jobs. Whilst this is good for the Indian offshoring industry, enlightened banks are using technology, such as robotic software, to automate these rules based tasks so that refunds are evaluated more accurately and more quickly. This does more than reduce the number of onshore and offshore staff required. It enables regulator deadlines to be met, customers to be dealt with faster, balance sheet provisions to be more accurate.