Lessons from Tesco Bank's IT-related crisis

The chief executive of Tesco Bank, Benny Higgins, says:“The test of an organisation is what they do when things go wrong.”So how well did Tesco Bank manage a crisis when IT changes locked out thousands of customers from their...

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The chief executive of Tesco Bank, Benny Higgins, says:“The test of an organisation is what they do when things go wrong.”

So how well did Tesco Bank manage a crisis when IT changes locked out thousands of customers from their online accounts and the Bank's helpline couldn’t cope with the volumes of calls? 

As the Bank sought diligently to talk to the media, and inform its customers with bulletins on its website, while trying to fix the problems, customers accused the Bank of not telling the truth. One insider claimed the Bank was in IT chaos, which it denied.

Many large companies - and government departments - go through IT-related crises. How they deal with them could determine whether their reputation and credibility suffer lasting damage.

In the way it handled the matter Tesco Bank unwittingly copied the way some central government departments act when faced with an IT-related crisis by, for example, comparing the small number of people affected with the high number who are unaffected, an approach that can belittle the experiences of the thousands who suffer the consequences of poor customer service.

Computerworlduk.com and BBC R4's Money Box led the field in bringing the  Tesco Bank story to public attention. In a personal tweet, Paul Lewis, the presenter of Money Box, summed up his reading of the Bank’s handling of its crisis: “An apology but no real understanding of how to deal with a big mistake”.

So what did Tesco Bank get wrong and how should it have reacted? 

Tesco Bank did some things well.  It:

 -          engaged with the media. George Gordon, the Edinburgh-based head of communications at Tesco agreed to be interviewed on BBC R4’s Money Box Live on Wednesday 22 June, day two of the crisis. A few days later, on Saturday 25 June, Tesco Bank’s CEO Bernie Higgins went on Money Box to answer questions from the programme’s presenter Paul Lewis. [Tesco Bank also responded quickly to my questions.]

-          apologised to customers, gave out information about the numbers of people affected and conceded that its service to customers had been unacceptable.

-          said it would deal with requests for compensation on a case by case basis, and made this clear on its website.

-         set up a Q&A on its website to help customers with log-in problems

-          eventually unlocked customer accounts and elicited praise from some customers for its helpfulness in doing so

What it didn’t do well. It: 

 -          continued to tell customers the technical problems were sorted when many people still could not access their bank or savings accounts. Customers accused the bank of not telling the truth. One, on BBC R4, asked Tesco Bank’s head of communications why the Bank was “lying” to customers.

-          told customers that calls to its helplines had been answered in an average of 15 minutes when, the next day, it took Moneybox’s Paul Lewis 54 minutes to get through.

-          used, initially, an 0845 number on its helpline which for some customers was a premium-rate number.

-          apologised for its poor customer service but at no point answered directly any questions about whether it had given out inaccurately positive information.

-          allowed an in-store customer whose “Clubcard Plus” credit card transaction was declined to face embarrassment and blame rather than say the problem was Tesco Bank’s fault.

-           compared numbers of customers locked out of their accounts with the apparently much larger number who had successfully logged in

-          suggested some customers were at fault, saying that in a typical week up to 1,000  people will have trouble logging on because they “have inaccurate security credentials in their possession … do not have the right details”.

-          might have underestimated the volumes of attempted log-ins on the first operational day after a major migration of customer accounts from one system to another. It’s unclear whether testing before go-live took a pessimistic view on possible volumes of log-ins.

An anatomy of the Tesco Bank crisis is here.  

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