RBS: Rectification Being Served or Reputation Badly Soured?

The recent crisis left the majority of customers without updated balances for up to a week, and some are still waiting. With the whole fiasco down to a technological glitch part of you has to admit these things just happen. We all know that modern society relies so heavily on technology and with that there is always a risk. However true this is, The RBS Group had to take a more professional and active stance, and so far they've done everything by the book:

Notify customers of issue – check. Fix the problem as fast as possible – check for NatWest and RSB customers. Send out apologetic statement and texts with updates for remaining customers – check. Keep banks open for longer to deal with back log – check. Extend customer support to mitigate outstanding problems – check. Communicate updates regularly – check.

Credit where credit is due, their communications has been regular, clear and concise. But, let’s take a moment to really comprehend what’s happened here. A brand dedicated to providing a financial service has been unable to grant its customers with their personal finances. No matter how well they’ve coped with the issue, the time it’s taken has given customers plenty of time to reconsider their loyalty.

The brand declares their three overriding goals as:

1. Serve customers well,

2. Restore RBS to a sustainable and conservative risk profile,

3. Rebuild sustainable value for all share holders.

As the brand itself states these three strategic goals as inter-dependant, it’s clear that this recent issue is a firm road block for improving the reputation. With shares of The RBS Group falling today by over 4%, it’s clear that its reputation has taken a huge blow. It goes to show that where people’s personal finance is at hand, fixing the problem and “sorry” might not be enough.

Take away the Net Assets from capitalisation and whatever is left is the intangible value - a brands reputation. The problem for brands is that it takes a long time to build up a solid reputation among customers, supplies, media and partners, but only a few seconds to completely demolish it. Maybe it’s too early to say now exactly how damaging this incident has been for The RBS Group, but it will be interesting to see in the next few days how many people have taken their accounts to competing banks. Watch this space.