Eiger Systems Limited, the Rugby-based supplier of data validation software for the financial services industry, today claimed that the cost of maintaining in-house biller systems is becoming unsustainable for the UK banking industry. “Growth in the popularity of bill payments is sending maintenance costs soaring”, said Jonathan Williams, Product Manager of Eiger Systems. “Ironically, services which have been designed to cut banking costs are currently having the opposite effect.”
The ability for customers to pay bills by Direct Credit is a key area1 of customer service for telephone and online banking providers. According to industry sources, bill payment continues to grow in popularity with payments made by remote banking more than doubling between 2000 and 2001.
However, the success of bill payments relies upon accurate data entry by the customer (or operator in the case of telephone banking). Failure to enter data correctly into the bill payment system can result in payments leaving the customer’s bank account but not being assigned to the appropriate biller’s bank account. According to Eiger Systems’ own research, 75% of un-applied transactions relate to bill payments and over 60% of complaints to internet banking services relate to problems with bill payments.
“Many banks maintain their own databases of bill payment details”, explains Jonathan Williams, “but this is increasingly expensive with around 10% of billers’ details changing each year, not including new billers offering the bill payment option for the first time.
As billers are not required to inform the banking industry of changes to their own bill payment requirements, banks have to find this data for themselves, usually by contacting individual billers directly.
“Usually, corrections are prompted solely by a telephone or online bank failing to process a customer bill payment successfully,” Jonathan explains. “In other words, the system is maintained at the cost of customer service.”
Eiger Systems estimates that the annual cost to adequately maintain an in-house biller system is as much as 350,000. This is in addition to the potentially much more significant costs of correcting data entry errors. With bill payment functionality central to the success of telephone and online banking services, Eiger Systems believes that these are costs the industry cannot afford.
BILLER WIZARD, Eiger Systems’ validation system for bill payments, validates the details of customer bill payments prior to submission to BACS for Direct Credit transfer from the payer to the Biller’s bank account. The system consists of a software application embedded within the paying bank’s internet or call centre application and a regularly updated Biller database that currently contains bill payment data supplied and updated by over 1500 of the UK’s largest billers. BILLER WIZARD ensures that payments are credited to the correct customer account and that the data entered complies with the biller’s reference number rules.