The travel bans across Europe hit last week, we were told to stay at home, we are advised to self-isolate, our children's schooling is cancelled, the supermarkets are working with face masks and social distancing … the world has changed.
As a result of so many people losing short-term income and work, the government is telling us they will help. We can have a mortgage holiday, not pay rent, increase credit and more without issue. The reality is very different.
For example, in my case, I have major exposures on flight bookings for future travel to conferences that usually get reimbursed after the event. With all these events now cancelled, I’m working on getting the money back from the airlines for cancelled flights. So, I ring American Express and ask how they’re dealing with this. No idea. They have no instructions on coronavirus and debt exposures. Instead, they block my card as I explain that I need to get the $25,000 of flight bookings reimbursed and will not pay the balance. After all, why would I want a $25,000 payment from my cash balance to my AMEX statement, which would leave me with a $25,000 credit a month later when the flight costs are returned?
Or take Barclaycard. Every time I try and login to Barclaycard Business, it doesn’t work. They don’t have an app and the whole system seems to have been designed way back in the 1960s … oh, in fact, yes it is.
My personal issue here is that I’ve got flight refunds coming back to Barclaycard and AMEX, but I don’t know which card booked which flight. It doesn’t say on the invoices. At least with AMEX, they have a nice app. With Barclaycard, I have no idea and the only way I can get any answers is to call their offshore call centre every day, as their awful online verification systems are broken, and see if they can tell me if an airline has made a refund.
Then there’s my mortgage provider. I ring my mortgage firm and ask about the mortgage holiday. Mortgage what, they reply. Mortgage holiday, I say. The government says I don’t need to pay the mortgage for the next three months. Is that right? They have no idea. We’ll call you back. They don’t.
I’m an exception. Unlike many, I have some savings and can burn through that for a few months to cope. But I have no idea how gig workers and people in service and hospitality are coping. No flights, no hotel bookings, no meals out, no taxi rides, no theatre outings, no nothing. It’s like the world has died in just a week or so.
Leandro Lemos, another Lyft driver: “They canceled all the conventions, the Warriors games. All the big tech companies are telling their employees to stay home,” Mr. Lemos said. His earnings have dropped to $150 a day from around $400 previously,
What has truly been notable here is the dearth of information from financial firms. Governments globally are updating daily with new stimulus, new ideas, new funding, new thinking. Banks and financial institutions? Nothing.
Well, very little. For example, on Friday I got an email from my bank. It sounded good. The head of business banking informs me that:
We’re offering capital repayment holidays on existing loans over £25,000
We continue to offer businesses access to funding. To speed things along, you can check if you’ve got a pre-assessed lending limit in the Barclays app or Online Banking
We’re working closely with Her Majesty’s Treasury and the British Business Bank to launch the Coronavirus Business Interruption Loan Scheme. We’ll publish more information very shortly, including how to apply.
I go to my app and look for the pre-assessed lending limit … there is nothing in the app that shows anything.
His letter went further however:
Getting in touch
We’ve launched a helpline for all our Business Banking customers impacted by the coronavirus outbreak. Call 0800 123 4567 between 8am and 8pm Monday to Friday (except bank holidays).
If you need help with your everyday banking or managing your business, you can still contact us by your usual channels.
- Use the app to call us directly – just tap ‘Help’ and ‘Contact us’
- Send us a secure message through your Online Banking, and in most cases we’ll respond within 48 hours
- Call our UK-based Everyday Banking team on 0345 987 654321 – we’re here Monday to Friday between 8am and 9pm, and on Saturday and Sunday between 8am and 6pm. We’re experiencing lots of calls, so we’re grateful for your patience while we try to help as many of our customers as possible.
I decided to call the Everyday Banking number and, after a long wait, someone picked up and hung up on me. Then, when I tried again, was told that my call could not be taken at this time. I finally tried called from the app, and the message was that it would take at least forty minutes to answer my call. I hung up*.
The issue here is that the government is just catching up with the crisis and cancelling all business. Business is panicking and working out how to cope by laying off all staff. Staff are all panicking because they cannot pay their bills, and are calling the bank. And banks are not coping because they weren't ready for all these calls and panicking people.
Now I know this has all come upon us by surprise - it's only a few months since the coronavirus broke out and the UK got their first case - so it is forgivable that organisations were unprepared. However, it is also a moment when some institutions can do amazing things to change the mindset of the customer. For example, it really jumped out for me when I saw this tweet from the US community bank Citizens Bank of Edmond, Oklahoma, USA:
Our @CitizensEdmond team just mailed out 60 day loan payment deferment options to all of our Citizens' consumer borrowers. For biz customers, loan officers are calling & equipped w/ our #COVID19 Relief Program to meet your cash flow needs. #1OKC #edmond #smallbiz pic.twitter.com/xzr02MA6WZ
— Jill Castilla (@JillCastilla) March 19, 2020
That’s the only bank tweet I’ve seen that is proactively telling people it’s ok not to pay back your loan in this mad, mad time. It’s leadership. It’s powerful. It makes a statement. Congratulations to Jill Castilla (CEO) and her team. Keep up the good work and other banks … take note.
* Interestingly when I did finally get through to someone at the bank the next day, I was directed from my business banking app to the personal banking team. That's a hangover from the history of this particular bank - I've dealt with them internally - where small businesses (SMEs) are treated as retail rather than commercial banking.
UPDATE ON BARCLAYCARD
So today was a real shock. Trying to pay for something using the only card that should be working - my Barclaycard - and the payment was declined. Twice. No idea why, as there's £1000s of credit available on the card, or so the automated systems told me last week, so I ring them and get this message (7 seconds of silence whilst waiting to get hold of someone):
I try several more times and finally someone picks up. It's an English voice. That's unusual, as I'm used to always getting through to an offshore call centre in India. The English person tells me there's no one there who can deal with my call, as lots of people have stayed at home due to the coronavirus. They tell me to try some other time.
I explain that I'm stuck in Poland, urgently need to pay for a flight that's just become available and need my card unblocked.
They tell me that they're not usually on the call centre operations and no one is available to help.
I hang up ...
... and then realise that India is closed today. Between India being closed and no one in the UK offices, no wonder they have an issue. Shouldn't someone have planned for this scenario however? Oh, someone did.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...