UK Internet Banking Error Rate Costs £58 Million A Year, Says Eiger Systems

Without specific guidance, over two thirds of Internet bank payers in the UK will select the wrong bank account and reference details from their bills when making bill payments and, without validation, between 5 and 8 per cent of reference

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Without specific guidance, over two-thirds of Internet bank payers in the UK will select the wrong bank account and reference details from their bills when making bill payments and, without validation, between 5 and 8 per cent of reference numbers will be entered incorrectly. Or so says Eiger Systems, a UK-based supplier of data validation software, which examined research undertaken by The Association for Payment Clearing Services (APACS) and DATAMONITOR (European eBanking Market Update, September 2002).

Eiger says that 75 per cent of un-applied transactions relate to bill payments and over 60 per cent of complaints to Internet banking services relate to problems with bill payments . If the firm is right, bank data entry errors are bound to increase as Internet and telephone banking continue to grow in popularity. Today, at 9.8 million, the UK has the highest number of Internet banking customers in Europe, 4 million of which are actively using online banking to pay bills. In 2001, says the firm, over 6 million adults in the UK used internet banking and 12 million adults used telephone banking, generating over 58 million payments.

Eiger Systems believes that the adoption of data validation within the online banking system is the only way to ensure that banks achieve their customer satisfaction targets for the delivery of automated banking services. In the interim, banks may face unsustainable growth in administration costs as a result of customer and staff data entry errors.

“Internet and telephone bill payment facilities provide banks with enormous opportunities to reduce their cost base,” says Callum Johnston, Managing Director of Eiger Systems. “However, insufficient attention is being given to the cost of correcting data entry errors so the potential payback from migrating customers from cheque payments to automated transactions is being eroded. If banks are to encourage more customers – perhaps even the majority – to move to online payments, then the automated validation of both banking and bill payment details online and over the telephone must receive a higher priority. In the meantime, banks face unnecessarily high costs in correcting their data entry errors and many banks seem unaware of the significance of these costs. Even a conservative estimate would place these losses in the region of 58 million a year for the UK industry alone.”

Eiger Systems specialises in the development and supply of data validation software to support automated banking and e-commerce. The firm describes itself as an application and content provider, supplying clients with both the software and the data to ensure the optimum efficiency from their electronic payment systems. Its product portfolio consists of BANK WIZARD and BANK WIZARD International for the validation of bank account details from UK and non-UK banks; BANK WIZARD for CARDS for the validation of credit, debit and charge card details ; BILLER WIZARD for the facilitation of telephone or online bill payment; BALANCE TRANSFER WIZARD for the validation of credit, charge and store cards during the account balance transfer process.

Eiger Systems says its products are available on a wide range of computer platforms, from PCs through to legacy mainframe environments. Open and flexible APIs facilitate integration into customers’ existing business applications. Eiger Systems’ commitment to customer quality extends from development using the acclaimed Unified Modelling Language methodology to class-leading technical support and renowned data integrity.

Founded in March 1997, Eiger Systems has expanded rapidly, reporting 100 per cent annual growth between 1998 and 2000. The company has returned profits every year since its foundation. Eiger Systems anticipates a turnover in excess of 3.5m for the financial year ending March 31 2003. In 2002, Eiger Systems was ranked as the fastest growing technology company in the Midlands and was ranked 44th in The Sunday Times’ ARM Tech Track 100, the recognised league table of Britain’s fastest growing privately owned technology companies. Eiger Systems currently employs some 40 people at its offices in Rugby, Warwickshire, UK.

Eiger says any organisation with a data validation requirement can benefit from the integration of a solution from Eiger systems. Its 550 customers currently include enterprises in the financial services, retail, insurance, local and central government, utilities, telecoms, broadcasting and charitable sectors throughout Europe.