Since it seems to be affecting quite a number of small and micro businesses this week, myself included, I thought I would begin by throwing in my two pence on the payments processing debacle at RBS-NatWest group this week.
During the latter decades of the twentieth century I worked on all three of the main UK bank payment platforms at the time.
CHAPS was an instant funds transfer system available, for a fee, to transfer money between UK clearing banks instantly and SWIFT which was the international service.
The big brother in terms of volumes of UK transactions was BACS, which processes direct debits, payroll and benefits and all sorts of other standard interbank payment transfer systems, which took three days to pass through the system.
Having a quick trawl around the web this morning it looks as though things have not changed much over the intervening years (though FPS and EFTPOS have transformed payment cycles recently) and the element that has failed is the RBS-NatWest side of the BACS (and I suspect, possibly, CHAPS) process.
I had long ago started my wanderings when the transaction volumes at BACS started to grow hugely in volume from 800 million (when I departed the DeHaviland works in north London) to over three thousand million per year.
We know from publicly available statistics that RBS group is half the size of Lloyds banking group and has just below 15% of the market share of retail accounts in the UK.
So if last Tuesday, when things went wrong at the Nat West data centre, was a normal day, the tape they got from BACS probably had around 1.8 million payments to process. That is, roughly speaking (it is a while since I did this), about one hundred and twenty megabytes of data. In 1990 that would have been daunting indeed; today you can carry it in your pocket.
Having no sensible accounts to reconcile this morning, I thought I’d trawl my memory and knocked together a basic program to do what the bank’s code presumably does. That is read a record from BACS, check it against the account as valid, write the transaction to a ledger and apply the balance change.
My little piece of code would have taken sixty-seven minutes to update accounts with 1.8 million transactions. Theoretically it should take just four or five hours to catch up three nights of data once everything is working properly again… It is inevitable that the RBS system will be more complex than my little test routine but even so, the situation they find themselves in today has left the banking group with an enormous public relations disaster on their hands.
I wonder whether, over the years, their banking systems software has been allowed to grow “like Topsy” without thought to form and efficiency, in the way that I wonder why Windows 8 is a gazillion times the size of Windows 3.1 (and takes ten minutes to load) while the only feature that it has, that 3.1 did not have and I want, is the ability to play high definition video.
Twelve million angry customers and a media scrum of hungry wolf reporters is, fortunately, not my particular headache this weekend. It is a good opportunity to consider the impact of reputation upon those of us at the opposite end of the business spectrum in small business enterprises.
Every microbusiness owner is aware that general branding and public relations should be high on our agenda but these soft aspects of promotion are often neglected in the pressures of the day to day running of our enterprise.
There seem to be a number of themes that constantly turn up in how-to articles and other regularly repeated and so-called expert advice on small business websites and forums.
In my opinion a lot of the advice is wrong, or at the least unsuitable to the British microbusiness environment. There are several different categories of small business and each need to approach marketing differently.
The received wisdom of recent times urges us business owners to build up a huge network of followers on Twitter, friends on Facebook and contacts on LinkedIn. This, if may politely suggest, is complete rubbish for the vast majority of small businesses. If suddenly, your business takes off on the web for some surprise reason, you will need to focus on communication and the scatter approach will leave you open to criticism.
Setting up a business page or account on a social site and not updating it regularly even in normal circumstances can leave an impression that your business is failing or inactive. If it is neglected in a crisis it could lead to loss of confidence from your clients and customers.
Some businesses rely on marketing reasonably priced luxury items to consumers then getting active on the social networks is going to be the cheapest and most effective way to build up a presence and reputation. For business to consumer enterprises, social platforms certainly can assist in PR.
There are clearly a further circle of people who are doing well out of social networking, else nobody would be pushing it. One product that these people are promoting tends to be themselves, which is something we too can learn.
As microbusiness owners, we are personally, to a large extent, our business identity and brand. To market our business we need to be comfortable with our brand and it naturally follows that we need to be comfortable with the way we present ourselves.
If your character tends towards introversion, you are less likely to feel comfortable plastering your face and personality all over the web than someone who is more of an extrovert. Personally, if I take one of the many free online tests, one day I may lean towards extraversion and the next introversion.
This, I guess, leaves me somewhere in the middle. Like many others, soon after launching this website, I succumbed to the overwhelming pressure to set up business pages and opened accounts on social networks all over the web. It was not long before most of these fell by the wayside leaving me ticking over on just a handful of the major sites.
My limited interaction with the social networks provides an accurate picture of the person I am happy to reveal to the world. As my business operates as a service for other business owners, I find that this leaves them comfortable too, knowing I can hold a confidence.
Far more important from the point of view of promoting the business has been the conventional stuff. Just like the public relations folk of the troubled banking group today, it is the mainstream media and word of mouth reputation that makes for reputation.
Fortunately that fits with my client profile.
Similarly, in the hospitality business, you would need to keep an eye on the specialist social sites like Trip Advisor; some client groups are found in the own forums, UK Business forums for small business owners for example.
A little and perhaps useful trick, you might like to know, if you want to keep track of what people are saying about you and your business on the web is to set up Google alerts for your business and name. It’s really easy to do and you can tweak it as you go along. It has helped me, on occasion; engage in conversation where I did not know I was being mentioned. It also helps to watch what your competitors are up to as well.
The most important lesson of the week perhaps is not to let things go wrong in the first place but, if things get out of hand, to really care for your customers and clients or you might lose their confidence for ever.