Berlind vs. Carr: BofA's TV-advertised IT-advantage falls flat on its face

Berlind vs. Carr: BofA's TV-advertised IT-advantage falls flat on its face

Summary: Perhaps proving that IT really does matter (and that it can't deliver on the promise it makes in one of its TV commercials), Bank of America is currently experiencing a disruption to its direct deposit operating.

TOPICS: Banking

Perhaps proving that IT really does matter (and that it can't deliver on the promise it makes in one of its TV commercials), Bank of America is currently experiencing a disruption to its direct deposit operating. Last week, I wrote up a blog entry (see BoA TV ad explains why IT Matters) positing that -- contrary to what Nicholas Carr has to say -- IT matters so much to Bank of America that it is running television commercials that literally advertise the importance of their custom built systems.  Referring to the perfection with which every one of the 40 million checks that BoA handles each day must be processed, BoA banker Lance Truman who stars in the ad says "One error in a million is simply unacceptable."  Then came the bad news.  Apparently, neither Lance nor the BofA can live up to that promise.  Late yesterday, I received the following notification via email:

If your paycheck is directly deposited into your Bank of America account, you will have noticed that your deposit has not posted for today. Bank of America has confirmed that they are experiencing system problems and currently do not know when the problem will be resolved and your accounts credited.....We recommend that you contact Bank of America customer service directly at 800.622.8731 with questions about this situation.

A prerecorded message at that 800 number confirmed that BoA is experiencing problems with direct deposit  and that the bank expects have the problem resolved later this morning.  I've got a call into BoA's public relations department and am awaiting an official response regarding the promise the ad makes and this failure to deliver on that promise.  In the meantime, BofA needs to give the hook to Mr. Truman and get those ads off TV since it's a bit of false advertising.

Meanwhile, when Nicholas Carr saw my original blog, he responded with his own writeup (see Don't Bank on it ...Boy,  talk about your double entendres!) in which he argues that the accuracy of BoA's custom-built check processing systems are not a differentiator on which customers base the selection of their banks.  Wrote Carr:

While the accuracy of the banking industry's check-processing systems is certainly amazing, is BoA's (or any bank's) check-processing prowess influencing how customers choose which bank to use? I very much doubt it. Customers assume that processing will be flawless; they don't take it into account in their decisions at all. And, in fact, I would guess that most banks do every bit as good a job as BoA in processing checks. It's an essential capability for a bank, but it's not strategic.

I don't know about you, but I'm pretty sensitive when it comes to my money.  Hopefully, BofA's public relations department will be able to explain just exactly how many checks were affected and what it plans to do about little details like lost interest and bounced checks that come as a result of this error. I even wonder if it will be able to fully account for the ripple effect of this breakdown.  With so many people now using electronic banking to automate the precise timing of certain monthly transactions, one can only guess at the potential extent of the damage.  Talk about IT mattering.   I can't imagine it not mattering in this situation.

Me personally? Well, as a part of my coverage of a recent Intel briefing, I just got done describing a very expensive, major undertaking at my house (installation of central air conditioning).  It's a part of a larger home improvement project.   I'm not writing checks every day, but I have to write a very big one today and I was counting on that money being in my checking account so as to minimize the amount I have to transfer from savings.  This is exactly the sort of error that causes me to take my banking elsewhere and I will.  Undoubtedly, someone will say I'm overreacting.   That's easy for somone else to say.  It's not their money.

Topic: Banking

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  • I wish IT *didn't* matter as much...

    Holy heck, David, IT was supposed to help, not hinder. Now, it *daily* gets in the way. The number of ways that IT just doesn't work right on a daily basis is uncountable. It has become a burden in many ways. THIS is the scary part in having to deal with major corporations (banks, etc). They screw up and you'll *never* be able to do anything about it. Good luck calllng customer non-support, the lowest-level (and cheapest) workers they can hire.

    "Your call is important to us." Yeah, right. Liars.
    • My response to ordaj

      I wonder if you'd be willing to go back to the days when you stood in line and had the teller type in your account information and stamp your receipt? Yes, I.T. does have flaws and no we don't all hire "lowest-level" workers. Although our company is not a bank we do take pride in the high level of service we offer our clients when things do go wrong. When our little group says,"your call is important to us", or "we're happy to help you." We mean it. Where would we be without our clients. I know the numbers of companies (or I.T. groups) who "care" are dwindling, but please don't paint us with the same brush.
      • Good for you. Seriously. But it is far too common.

        I spend endless hours babysitting technology, fighting technology, and bearing the brunt of technology. It needs to get better.
  • Carr assumed no difference.

    If two banks offer the same services at the same level of quality. Then no, it isn't a differentiator, is it? However IT enables abilities and advantages that would otherwise be unavailable. It isn't so much that IT matters, but that IT enables things (services) that do matter. He is right, we assume banks to be flawless. At that level there is no difference. You cannot be more flawless than another bank. But when banks fail to achieve perfection, the level of imperfection does influence behavior... is a differentiator.

    IT matters not because of itself. But because of what it offers. Unfortunately many people and businesses, it would appear, fail to see this. IT is like research. Research isn't the goal, its the means to something better.
  • I always thought

    that the bank of america ad was about replacing all their tellers with atm machines, since they built "all the functions of a full service branch into every machine".
  • BofA's IT Malarkey

    In 1999, my wife opened a "guardian" account for our daughter who was under 18 at that time. Some years later, her ATM card was stolen by a "friend". Daughter didn't worry about misplacing the card because she didn't have any money in the account ($2.18). In 2002 BofA mistakenly deposited $1,200.00 into the account which was withdrawn by the "friend" over a period of 5 days buying beer and cigarettes with cash-backs. Fast-forward 2 months and the wife gets a nasty-gram from BofA that she is in trouble and owes the money to the bank. We take 2 months out of our lives to prove to them that we (and daughter) had nothing to do with any of the transactions, even getting video proof that daughter wasn't responsible for the withdrawals. They agreed and removed the $1,200 "hit" they had put on us. Lo and behold, they didn't remove the $360.00 in fines/fees that had accumulated. We argued it, and they reduced it to $64.41, which we still beefed - and they swore they fixed it. Fast forward to 2005, and the wife tries to open bank accounts for our other children, but gets denied because she is listed by CheckSystems as a "account abuser". We are still fighting the battle - and BofA's system is so obfuscated that they have little/no records of everything that happened/transpired. Now we are at the mercy of a small group of people who's sole purpose is to say "no". And that's after being a loyal customer for 10 years. What IT.......
    • BoA really Does Not Care

      I too experienced the fact that BoA does not really care about the little guy.

      I immediately reported unauthorized charges on my credit card. I refused to pay. I called, wrote letters and called some more.

      My refuted charge of $200 now sits on my credit report as $600.

      If they don't care about their customer, they sure don't care about the IT.
  • why claim phish attack proves your bias? i have BofA direct deposit and got

    my check this weekend without any problem.

    i did not recieve this email.

    it has been my experience that sometimes these kinds of email are legitimately sent to cover one's rear in case there is a problem, even though nothing comes of it.

    it has also been my experience that spammers get great joy out of scaring people with these kinds of email, even to the point of phone calls.

    so chill.

    do some real reporting.

  • How important is IT to BoA?

    I specifically moved from my credit union, which had only minimal IT support for online banking to Bank Of America so I could pay my bills online and have better control over all my accounts. So much for the statement that people don't go to BoA because of their IT advertisement.

    That being said I have to say that my credit union, for which I used direct deposit prior to my move to BoA, also had problems from time to time. Maybe five times in eight years they also had trouble posting my direct deposit on time. I get two deposits a month thats 5 out of approximately 190 times.

    Of course I wrote checks then, so if the money wasn't there they didn't go out. With online bill pay my payments are already set up. Will BoA be smart enough not to debit my acount when they screw up my deposit? Will they then try to charge me if my debits bounce because they messed up a valid direct deposit?
  • B of A

    Couple of weeks ago, PayPal got hacked/phished/etc. Showed a charge against our B of A account. PayPal credited the $ back to B of A when we disputed the charge with them (PP)--which B of A then took 4 days to put back into our account--bouncing our checks the whole way.

    Deposited a check at the drive thru about 4:30 one afternoon--they won't credit on our account until 6 PM the following day--a delay of 25+ hours.

    Got my last mortgage with them--their Rep said not to worry about the 100-yr flood plain determination, let's close. Couple of months later, they started charging me for Flood Insurance--we had to get our own surveyors out--3 separate time--to prove we were outside the flood plain. They credited back the insurance costs (after about 10-11 months of charging us), but wouldn't give us the interest we could have been making on that money--or credited against the principal of the loan.

    Where are the Bank Regulators when BofA needs spanked???