The Importance of the Progression of Digital Technology Throughout Bank of Ireland

This interview was conducted with Michael Murray from Bank of Ireland in Dublin and explores the progression of technological advances throughout his entire work life. Michael joined Bank of Ireland Group in June 1998 and has worked in various roles within the Group including Credit and Market Risk Division, Business Banking and Corporate Banking.  Michael is currently a Senior Director in the Property Finance division of Corporate Banking.  He is responsible for New Business Origination and Construction and Development Finance.  Prior to joining the Group in 1998, Michael worked in London for 12-years with Bank of Ireland, Dunbar Bank plc and Hypo Real Estate plc.  Overall Michael has 34-years banking experience, the vast majority of which specialised in property finance, with a strong emphasis on construction and development finance in Ireland and UK.

“At that time the digital technology I recall were the Bank’s mainframe computer that was used to record all customer transactions- cheques, cash withdrawals and lodgements. If a customer wanted  to make a lodgement, order a cheque book, make any changes to their account they would have to come into the bank or write to the bank.”

Can you explain how the absence of digital technology affected your line of work when you first began working in the bank in 1986?

“Working in the bank there were no computer terminals which meant we were unable to look up an individual account to find out what the up to date balance was. It was recorded on  micro-film that you looked at through a magnifying screen, however the problem was the transactions shown on the micro-film on customer accounts were not “real time” – they were one or two days old. Trying to avoid an account going overdrawn was quite difficult and caused a lot of transactions to be rejected by the bank because of insufficient funds in the person’s account and returned unpaid.”

When speaking to Michael he recounted further problems that were beginning to arise due to the lack of digital technology in the bank, especially when dealing with Irish customers in the London branch he worked in. 

If a person had an Irish currency cheque to lodge to their account, it would take up to 10 days before they could take money out in cash and it would also cost a small fortune to do so – it was a completely manual process that involved essentially posting the cheque to the bank in Ireland and asking  them to send a sterling payment via bank draft again by post and  then that had to go through a process before the customer could eventually take cash out- not very efficient at all! Furthermore, all communications with customers or the bank’s advisers were all by land-line phone and post.  Mobile phones in the early nineties were rare and those that existed were like cement blocks!”

Michael got involved in corporate lending in 1990 and found this area to be the most challenging in regards to the lack of digital technology. 

“At this time the loan account was recorded on the mainframe computer which recorded debits and credits on the loan. Interest was also calculated, but once again not in real time so it meant doing a lot of manual calculations in order to figure out how much a person needed to pay to repay the loan entirely. As well as this all customer details had to be recorded manually including personal details or securities held by the bank to secure the repayment for the loan. Extracting information from index cards which were handwritten was time-consuming and tedious. If the bank needed to know how many loans they had you would have to count up all the cards, or how many loans they had in Dublin, you would have to separate all the cards and then count them. This process was prone to a lot of errors which made it difficult to analyse all the loan data and, as they were handwritten it could be difficult to read a person’s handwriting. As well, different coloured pens were used to signify different things e.g. if details of the security were crossed out in pen it meant the security was released but if it was only marked in pencil it meant it was with solicitors, so you had to really know the codes! When desktop computers with databases and spreadsheets were introduced it was easier to extract and analyse data which meant we could manage risk better, avoid errors and it was obviously a lot quicker.” 

Michael recalls the painstaking exercise that was the project of computerising the loan data. “This involved taking all information from the index card and putting it on a database. This led to each lender having their own desktop computer where they could access the information easily and work simultaneously. Remember, only one index card could be seen by one person at a time. Thankfully, the end results simplified future loan book analysis, making them speedier, accurate and enabled analyses of the portfolio of loans in many different ways improving risk and credit management.” The progression to online banking in the late nineties meant things were becoming more efficient for the bank, companies started moving all their accounts online which they could manage and operate from their own offices. There was no need to go into the banks for normal day to day banking which again was allowing work to become more efficient. 

How have you seen digital technology progress throughout your time in Bank of Ireland?

Michael returned to Ireland in 1998 and soon began to see improvements in digital technology in his own day to day activities. “One thing that stands out was that it was my first time to use a mobile phone!  Over subsequent years that was replaced with a blackberry and eventually the iPhone accompanied by iPad and laptop as well as your desktop computer. After a couple of years email was rolled out.”

The main progression that Michael spoke about was the evolution of the Internet and emailing and how it was accessible by everyone. “The introduction of Google and Facebook was actually quite dramatic as information was more readily available and allowed the bank to do back checks and seek further information on customers. Emailing brought about a lot of advantages as communication was now available 24/7. The need to be permanently in the office was reduced and the bank saw employees beginning to work from home. Thanks to progressions in technology employees are now benefiting from a better work-life balance.”

Michael’s final point reinforced once again the importance of digital technology for the organisation. “Banking is a highly regulated industry with lots of reporting needed to go to the bank’s regulator. Information has to be accurate or the bank may receive a fine. The development of risk management tools like credit scoring has since sped up assessment of loan applications making it easier for the bank to manage risk. With the digitisation of banking,  information is real time and communication is immediate. The progression of digital technology has also aided driving costs down as the amount of people needed to run the organisation has been reduced. Bank of Ireland went from 16000 to 10000 employees in the last 10 years. With the arrival of Revolut, pressure is on all banks to meet the efficiencies that they are setting.”

Following my interview with Michael, it is evident that today, due to advances in technology, banking and working has changed completely. It is easier for the customer and the bank to manage the transactions that occur on an account.  If you don’t have money in your account you won’t be able to take cash out.  You can amend your banking details etc. via your phone, iPad, lap-top etc. Cheques are almost extinct with the use of debit cards, smart phones and technology.  There is very little reason to visit a bank anymore. 

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