Hi all,
Interesting views!
I used to work at a very large and well know US Software house called Intuit here in the UK offices. As many of you probably know, they produce the rather excellent Quicken software, here, I used to look at the online banking provisions of the 25 or so UK banks and regularly 'test' them out. Prior to working there, I also worked at another US software house involved with financials and that goes back to early 99.
The UK is quite a few steps behind in terms of online banking, although over the last 3-4 years the gap has closed somewhat. That gap is down to more people in the UK owning a computer rather than any behaviourial changes. Way back in 99/2000, I remember speaking to various Technical people at the USA and Canadian offices and them literally laughing at how far 'back' we were in terms of online banking and infrastructure for business to business and some home aspects such as ISP's.
The USA has something like 3000+ banks and inevitably, increased comptetition drives forward technlogical developments. Downloading and importing your account transactions and details was standard fare for US/Canadian users even when I started off in 98ish, where UK users sometimes asked 'I can see my statement online? wow' !
Some banks realise the importance of it's customers being able to be as precisely upto date than others. Things may have changed since a few years ago when I used to regularly test stuff like this, but I don't think any of the UK banks allow for instantaneous transaction depiction on their online banking service. My main banking is with HSBC and I have a current account with them and a credit card. If I make a purchase say 1pm on a Monday afternoon using my Chip/Pin Debit card, it'll show up at the start of the following banking day, sometimes later on that next business day. However, should I deposit some cash at 2pm on Monday afternoon, the account and thus the internet banking feature, is instantly updated. With my HSBC credit card, it's slightly different, I make a purchase say 3pm Monday afternoon, then if I go home say by 4pm, I won't see the transaction itself listed, but my 'available credit' will be less by that purchase amount. So in one way, it's 'semi instant'
I then fire up my Quicken and update everything after business hours - knowing that 'some' elements are bang upto date, and others are in the pipeline for the next day and credit card purchases will show up the transaction 2-3 days later.
Not sure if any of the other 'Big 5' UK banks are any more 'responsive'. Some UK banks still don't offer any increased online downloading and statement download features as what was available prior to 1998! what amazes me is 'Egg' - they market themselves as an 'Online bank' great! I even used to have one of their credit cards until recently, and in the 5 years or sO I had it, on their website they STILL do not even offer the option to download your statement! I find that just totally ludicrous! - I got rid of the card recently as well and the fact I couldn't monitor my account the way I wanted becuase they wouldn't offer this basic feature was part of the reason.
There are a few other banks with woeful online banking facilities - Natwest had a pretty good system, but were (don't knwo about nowadays) prone to making changes and sometimes not entirely welcomed by their users. Barclays, another bank that as far as I know, still don't offer a statement download option in the universally recognised financial file format of OFX data (the older QIF wasnt offered either) - Microsoft Money users were also affected by these big banks offering woeful online banking experiences compared to the USA/Canadian banks. Even some of the local banks you find in the USA, offered much better online services than some of the UK's 'Big banks'!
In a nutshell, the UK banking industry and the technical side of things, just didn't have the demand from UK banking customers to implement systems. Over the last 3-4 years, I know things have gotten a little better, but overall, nope, still pretty dire. With the current economic credit crunch, there is talk that the UK population is being dragged kicking and screaming into 'responsibility' of their money and software and tools and a mindset change to 'manage' money is making more of an impact. This may fuel demand for the big banks to update their infrastructure to offer features the US/Canada banks have been offering for years! - I can only hope this is the case!
Chip and Pin was one of those things that was like a long and painful slow birth. The various G8 Euro countries had the system in place years before the UK adopted it. Why were we so slow again? usual, people's lazy mindsets. The banks at the time were making alot of noise about fraud, credit card fraud and the methods used, yet they still used the very sloppy 'manual swipe and carbon copy leaflet' style systems that were a very easy system to commit fraud on. The Euro banks were happily reporting vast reductions in the same crimes saving them X millions per year, and the hapless UK banks carried on crying. It took the government to step in and slap the UK into some sense into updating itself. Chip n Pin introduced, and lo and behold a significant reduction in fraud - who'd have guessed?!! (granted, there are flaws and some more sophisticated crime as a result) - In the USA, the criminals tended not to go for nicking someones credit card and writing out the signatures type crime that was so prevalent here, hence no need for the chip & pin system. I still think that's the normal now? i don't think the USA has forced legislation for all banks to adopt chip and pin? - I might be wrong though!
Without deliving into the Security side of things, quite a few of you have mentioned the various systems designed to offer strong security now that 70% of UK households own a computer. Really, still the best way to keep yourself as safe as possible is to have well reputed Internet Security software running on your PC that's kept up to date, your operating system fully patched and upto date. Those more technically knowledgable can increase protection with additional anti malware and spyware to ensure a very secure PC and connection to banking systems. Some banks have gone a little too far, sacrificing accessibility and useability by using large sized calculator style security 2 step authentication devices. I also have Business banking via HSBC, and their physical code generator is a very svelte and small 4 x 2 cm light plastic oval with a single button and display, not sure if Barclays have replaced their silly USB connected large credit card sized authentication gizmo yet!
Lastly, as for how the banking and payments systems work, yes, there is a time delay for transaction processing etc. Every time you swipe and enter your pin and the 4-5 seconds it takes for the 'authorisation' to come through involves a real myriad of systems and processes from various vendors and financial outfits as well as your particular bank - I won't go into details, but it's ALOT of back end processing that goes on! - The actual PIN authentication takes place on the physical card itself - that's why you see 'PIN Accepted' on the terminal almost immediately you press the enter key (unless you're a bit langered and punch yer pin in wrong!). The inital reason you don't usually see your transactions right away is that the various payment gateways and batch processes occur overnight at pre-set times. Small businesses can't afford the fees for faster processing (and hence them getting paid quicker) whereas the large retailers can, but often with the sheer volume of transactions taking place it means their window of processing is often a constant live process (to an extent and keeping it simple here) so your transaction just 'waits its turn' really!
The USA is faster due to competetion and better infrastructure, the UK is slower due to a few large behemoth companies and systems - I think soon the latest governmental slap to process written cheques within the day ( i think thats what it was) comes into effect after it's been shown the old '3-5 working days for cheque clearance' adage is now defunct as proven and shown to work again over on the Euro continent.
To sum up, the UK banking system is slowly speeding up, with a combination of government slaps, customer requirements and mindset change, and good old fashioned competition on the world stage - the banking system, along with a few other industries in the UK, need to make it happen just that little bit faster, but I'm afraid on the world stage, right now it's bit of a tall order and we do risk being the bottom of the rung in these areas compared to the other G8/G20 countries.
Cheers! DtM! West London & Slough UK!
