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Summary
- 16 September 2020 was a bad day for NatWest and Royal Bank of Scotland customers
- The impacted customers took to twitter handle to complain about their struggle with their online accounts
- Some of them were unable to log in, make payments, or view their bank accounts
- Both the banks confirmed the issue, investigated the same, and got it fixed after 3 hours
How often do you visit the banks now-a-days? With the advancement in technology and digital transformation, the world is moving at a faster pace. Earlier, people used to visit the banks every now and then, but now all you need is internet to avail any such services at your fingertips. Though digitalization has numerous advantages, there are also some cons to it. NatWest had to face one such issue on 16 September 2020.
NatWest and the RBS (Royal Bank of Scotland) customers across the country were unable to use their own accounts and left powerless to use their payment cards for hours following a huge system breakdown. The bank customers were not even able to make online payments or log in. Social media was hit by the people stating their problems and fears about their money disappearing, being unable to make payments or even log in. The outage was reportedly one of the latest glitches that impacted NatWest's infrastructure.
The problem continued for 3 hours which started at 7:30 PM and lasted till 10:30 PM. The customers disclosed that they were also facing problems regarding online payments for fuel at petrol stations, online shopping, and withdrawal of money.
Similar Incidents in the Past
The companies faced typically the same problem during the month of November 2019. The issue stated back then was that more than 2700 customers of NatWest and RBS were not able to make the payments or log in as the server went down during the Black Friday which left many people cash less.
Additionally, one such incident also took place way back in the year 2016 when the customers of NatWest, RBS, and Ulster Bank had to face payment problems for few hours.
Let us now take a closer look at understanding the process of digital transformation and the pros and cons involved in internet banking.
Digital Transformation
The integration of digital technology into all the areas of a business, leading to fundamental changes with respect to business operations and value delivered to customers is known as digital transformation. In simple words, it is all about changing the way a business interacts with its customers in order to provide a consistent experience whenever and wherever required.
The companies are being forced to change their business models and adapt to the new market reality because of digital transformation. It’s not the companies that are driving this change, but it is being driven by the customers and more so by the coronavirus pandemic in the current scenario.
Internet Banking
Advantages: An online bank account is easy to open and simple to operate. It is standard, as it can easily be used to pay the amount and transfer the funds between accounts from almost anywhere in the world.One doesn’t need to stand in a queue to pay the bills nor have to keep the receipts of all the bills, as it is easily available all the time on internet.
People can perform their work from anywhere at any time, even during night or on holidays when the bank is closed. Funds get transferred from one account to another in lesser time. People can track about any fraudulent activity or threat to their account before it can pose any severe damage.
Disadvantages: Understanding on how to operate internet banking might be difficult for beginners. Good internet connectivity is a must, as online banking cannot be accessed without internet.
There could be security concerns regarding account information getting hacked and password security as any mistake done while using it may lead to misuse of the account. The information might get spread on several other devices increasing the risk factor.
Bank servers are also key ingredient in online banking. If the bank server is not good, due to weather, slow network or any unconditional situation then the account cannot be accessed and due to the loss of connectivity it is sometimes hard to know about the transaction went through or not. Probably some similar technical issue would have arisen in the cases of NatWest and RBS.
Let us now take a sneak peek at the latest financial performance of NatWest Group plc along with its stock performance.
NatWest Group plc
NatWest Group plc a financial company, headquartered in Edinburgh, United Kingdom. It provides services across the segments of banking, retail & commercial banking, investment & wealth management, and global finance services.
On 31 July 2020, the bank declared its half-yearly results for the period ending 30 June 2020. H1 2020 performance was significantly impacted by the challenges and uncertainty posted by the Covid-19 pandemic. In spite of that, NatWest Group maintained a strong financial position, driven by a resilient, capital generative, and well diversified business. Operating loss before tax of £770 million was incurred by the company, and operating profit before impairment losses of £2,088 million was recorded during H1 2020. It also recorded a net interest margin (NIM) of 1.67 per cent, which was 22 basis points lower than Q1 2020. It was mainly because of the contraction of the yield curve, impact of a change in the mix of lending, and excess levels of central liquidity.
NatWest Group plc (LON:NWG) stock was trading at GBX 97.58 on 18 September 2020, at 10:53 AM, down by 2.47 per cent from its previous close of GBX 100.05. The 52-week low/high price was GBX 100.05/120.90. It was having a market capitalisation (Mcap) of £12,133.16 million. The volume traded at the time of reporting was 6,955,939. The company recorded a negative return on price, which was 17.25 per cent on a YTD (Year to Date) basis.
To sum up, during the past few decades, the banking sector has been through a lot of technological advancement. Now-a-days, most of the transactions can be carried out online with just a few taps on your bank’s mobile application. But sometimes the technology creates a lot of problem for these banks, like NatWest and RBS had to face criticism because of the digital services outage.
