Re: UKNM: Halifax suspends net dealing

[Ray Taylor]

 > The Halifax has suspended its internet-based share-dealing service after

 > customers were able to access other people's accounts...

 > http://news.bbc.co.uk/hi/english/business/newsid_538000/538285.stm


Most major banks can't keep control of their security offline, so how are

they going to do it online? The difference is that, when they make mistakes

offline, they get away with it because nobody gets to hear about it. Because

of all the interest in everything netwise at the moment, the slightest

mishap will get right royal treatment in the press.


But the biggest problem is the fact that the banks are all busy introducing

supposedly new sytems, but that import all of the crummy things about UK

banks. This, at a time of golden opportunity for reorganising the whole

range of banking business processes.


As an example, when HSBC/Midland Bank UK set up First Direct, they set up an

entirely new operation with an entirely new set of business processes and

managed to avoid repeating most of the mistakes of their bricks and mortar

cousins. But rather stupidly, when I talked to my previous bank about

transferring they said "but we can do telephone banking too!" Which somewhat

missed the point that direct banking is about a different way of banking not

about using a telephone to find out what your balance is.


So far, all of the online banks are making the mistake of trying to squash

their clumsy old-fashioned cobwebby business models into a web site

interface. As an example of this, I was in a meeting with a bunch of VC

big-wigs the other day and one of them, a director of a £100 m+ company,

said that he had been refused a current account with Co-op's Smile on

grounds of credit-worthiness. Which made me feel a whole lot better when the

same thing happened to me (though perhaps with more justification).


But then you could say the same about retail. Few UK retailers have yet

sussed what e-commerce is all about. And yet all they have to do is look at

Amazon for a clear picture. Though I am not entirely sure that everone at

Amazon understands the difference between what they do and what so many

others have so far failed to do.


Question is, who will be the banking equivalent of Amazon? Who will be the

first to set up a properly functioning direct banking operation on the

Internet?


Smile has a long way to go before they even have a properly functioning

account application process. I have tried First Direct's online equivalent

(in test phase) and it is too slow and clumsy to be of much use. We use

Royal Bank of Scotland's business online banking system - it works fine and

is very useful for bypassing paper transactions, but it is somewhat basic

(and not internet). And I am testing out the various egg accounts. Anyone

tried any of the US offerings?


Ray Taylor

eyeconomy 



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