The UK payment industry is an essential part of our national
infrastructure. In theory, banks and payment organisations should
work together to harness the latest technology in areas of common
interest. New and useful services can then be bought to market
quickly, leading to increased productivity.
In practice, however, this has not happened. Attempts by the banks
and payment industry associations to develop various industry-wide
payment systems, for instance in the area of bill payment, have
either been abandoned or mothballed.
Now, there are signs that this may be about to change. Bacs, the UK
bank clearing house, looks likely to press ahead with plans for a
radical restructuring.
Under the plans, first revealed by Computer Weekly about a year
ago, Bacs would split into two separate companies. An
infrastructure company would be responsible for running Bacs' IT
systems and developing new technology. The second company, run by
Bacs members - the banks and building societies - would be
responsible for running its direct debit and credit services.
Under this revamped Bacs, non-banks - for instance software
suppliers - would be allowed to join the elite clearing club and
develop new services and technology in partnership with the banks
and Bacs' IT department.
Although the legalities of the proposed split have yet to be
agreed, it could provide the shot in the arm the payment industry
needs by allowing a wider mix of companies to develop new services
and technology. But while analysts have broadly welcomed
discussions, some have also sounded a note of caution.
Their concern is that there will be a "disconnection" between the
technologies and services the banks want and what the IT
infrastructure company wants or is capable of delivering. Without
constant communication between the two companies and tightly agreed
objectives, Bacs' well-intentioned moves to revamp the payments
industry will be a waste of time.
The danger of a disconnection between what IT departments provide
and what their end-users want is underlined by a story told in this
week's issue by Colin Cobain, UK IT director at Tesco.
To help him understand better the needs of his end-users, Cobain
recently spent time as part of a company-wide "back to the floor"
initiative that saw him serving on the delicatessen counter and
stocking shelves in a Tesco store in Devon. After a session spent
manning the tills, Cobain was forced to conclude that a project his
team was developing to facilitate the weighing and charging of
fresh goods simply was not addressing a real need among users. The
project was tweaked accordingly.
The example is a timely reminder that you can construct the most
perfectly conceived, architecturally beautiful IT application in
the world, but unless end-users have been involved from the outset,
it is unlikely that they will welcome it or even use it. Similarly,
lines of business can conjure up the most extravagant IT solutions,
but unless their IT departments are able, or can afford, to deliver
them, they are wasting their time.
All parties involved in the changes at Bacs would do well
to bear Cobain's cautionary tale in mind over the coming weeks.