I’ve just read the BBC News report about the problems Northern Rock’s online savers are having in accessing their funds. Like many online accounts, it appears that Northern Rock’s online account holders can only access their funds online in accordance with their terms and conditions.
This is clearly both frustrating and alarming to the bank’s online customers, who like many of their offline counter-parts, are trying to withdraw their money quickly, since they all perceive their investments as being far from safe.
I can’t help but wonder whether this will have an impact on the public’s perception of online banking as a whole. I think people may conclude that online-only accounts are inherently less secure than traditional accounts.
It seems to be certainly true that the bank’s traditional customers have received better service when they’ve eventually managed to get inside their branch than their online counter-parts. The traditional customer has obviously had to queue for ages, but at least they could see their position advancing in the queue, which at least offered some comfort for their patience and perseverance.
The problem for online customers is that they have no way of knowing where they are in the queue. In fact, technically, there is no queue. Each time they try to gain access to the bank’s web site, it is something of a lottery as to whether a web server will be available to service the request.
I suspect that even if a customer has one web request satisfied then there is absolutely no guarantee that subsequent requests will be answered – something akin to being told in the branch to go to the back of the queue once you’ve been greeted by the cashier, which would probably result in considerably less calmness than we are currently seeing on the high street outside the bank's branches!
The message is clearly that Internet-customers are second-class citizens as far as the bank is concerned, especially if one accepts that actions speak louder than words.
I think that when the dust settles, many online bank customers will re-evaluate how much money they should keep in their online-only accounts. It may also have some impact on how safe people consider Internet transactions to be in general…