Bank 'glitch' last thing small firms needed now

BELFAST BRIEFING:WHEN ULSTER Bank chief executive Jim Brown was asked recently if, in relation to the bank's IT crisis, he had "turned it off and on again" it was only half in jest.

Sinn Féin’s Phil Flanagan might have joked for a second about what the bank likes to call the technical “glitch”, which has brought Ulster Bank’s parent, the Royal Bank of Scotland, to its knees, but for businesses in the North there is no funny side to it all.

When a bank is in a position where it is answering on average 15,000 calls through its call centre and dealing with 25,000 customers face-to-face on a day-to-day basis, it is clearly no laughing matter.

On behalf of Ulster Bank, Brown has had to soberly “unreservedly apologise for the disruption that the issue has caused our customers and customers of other banks” in Northern Ireland.

He said: “It is unacceptable, and our customers should expect better from us.”

Brown will get no argument on that point in the North, particularly from businesses which were already struggling before Ulster Bank pulled the rug from under their feet.

Small firms are complaining bitterly – but many do not want to be identified because they are worried about the impact on their banking relationships.

Firms claim they have been unable to check their accounts, and have no clue as to what is going on with their day-to-day business finances.

One business owner last week detailed how he had queued in line with dozens of frustrated Ulster Bank customers in one branch in Mid-Ulster to withdraw a large sum of cash simply to pay his staff.

“I don’t know what is happening with our wages – we’re a small outfit and I can’t face another week where they haven’t got their money – maybe they’ll end up getting paid twice.

“I don’t know, but when people come and tell you they don’t have the money to pay for their groceries in Tesco because you haven’t paid them you have to do something – don’t you?”

His is not an isolated example, according to the Consumer Council for Northern Ireland. It is calling for Ulster Bank to put “contingency plans” in place for small businesses which the council says are under “severe pressure” because of the technical and backlog issues at the bank.

Antoinette McKeown, chief executive of the council, said it is clear from the level of complaints and calls that the body has received from businesses that there is a “lack of consistency in branches in how they deal with customers”.

The council cites the example of one small business owner, an Ulster Bank customer, which it says perfectly illustrates what is happening to businesses across the North.

“She has been unable to check her account or receive and make payments and hence pay her suppliers. Therefore she has been left without valuable products that she needs. This is having a very worrying effect on her and her business. She also has employees to pay. She has been forced to pay in cash for what little supplies she can get in the short term to get her business running.”

Brown has given a public commitment in Northern Ireland that no one – customer or not – will be left out of pocket as a result of what is fast becoming a customer relations nightmare for the bank. But will it be enough to calm the anger and resentment of its customers?

Not according to the SDLP MP Margaret Ritchie. “Everything from people’s benefits, wages, bills, holidays and weddings have been put on hold due to this terrible failure by RBS.”

Ulster Bank, as you would expect, claims its customers have not been deserting it in floods to rival banks because of the IT crisis.

Brown told the Northern Ireland Assembly’s committee for enterprise, trade and investment last week: “So far we have not seen any attrition in customer numbers, nor have we seen any outflow of customer deposits from the bank.

“When this episode is over we will work very hard to regain the confidence and trust of our customers and to ensure that we continue to remain a vital and necessary force in Irish banking.”

But anecdotal evidence from rivals, especially in Belfast branches, would suggest that fed-up customers are simply switching their accounts. Although Ulster Bank maintains its problems will all be resolved by July 16th, there appears to be little confidence that the bank will pull this off – particularly when it comes to its business customers.

The Federation of Small Businesses says the problem has simply dragged on for far too long.

“Access to credit is essential for small businesses. Without it they can’t pay their staff, their suppliers or their bills.

“This situation has only added unnecessary pressures and stresses to small businesses at a time when they need as much support as they can get.”

The federation is also worried that the fallout from Ulster Bank’s IT crisis could be just as bad in the weeks to come. It said its members are already worried about dealing with delayed payments, overdue invoices and other associated issues.

“Small firms are resilient and able to adapt when a crisis arises. However, the extent of this situation, and the sheer length of time it is taking to resolve, will do little to improve the already difficult relations between many small businesses and their banks.”