Initially, Grant was mildly puzzled at first, when he was unable to login to his bank account until the end of in the year.
After a few years as the customer of the National Australia Bank’s digital branch, ubank, it wasn’t the first time that he’d faced problems.
What appeared as a minor glitch become a saga of months. He was not able access his cash for weeks, then had his account shut down through the institution, then then spent several hours calling to find help.
The chief executive officer of ubank Philippa Watson, which has merged with neobank the year 2021.
“It’s extremely frustrating,” he says. “I’ve never had anything similar to this in my banking career.”
The doctor who did not wish to have his name published due to reasons of privacy, isn’t on his own. Since November the customers have complained to UBank as well as the financial regulator in the face of a myriad of problems resulting from the ongoing merger with Neobank 86 400. A plan to transfer many thousands of customers to the platforms that are used by the 86 400 company was stopped during the Christmas season as ubank rehired 170 new customer support staff.
in 2021 NAB made public its announcement of a $221 million acquisition of 86 400 and acquiring the Neobank’s technology platform as well as mobile banking platforms in an effort to keep ahead of the game and draw younger customers to its digital branch Ubank.
The announcement was made at the time ubank stated that the agreement will “enhance customer experience and address their evolving needs” to establish a world-class digital bank, and help to create”the “next generation of easy mobile, quick and fast bank solutions”.
In the two years have passed since this merger took place, customers say that the merger has still not happening, and former employees have suggested the current issues are a result of an unsettling merger process .
‘Mass exodus’
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Ubank with over 600,000.00 customers was among Australia’s first digital banks to hit the market in the year 2008.
In the ten years following the 86400 is a neobank, which was funded by the payments company Cuscal it was officially launched in the year 2019. It was among the very first start-ups granted a banking license through the Australian Prudential Regulation Authority, as well as a variety of other neobanks. They promised to break out of the banking oligopoly that has been in place for decades and create a distinct point of difference for Australians.
Then came the coronavirus outbreak, bringing the risk of economic instability and a negative prospects for tech startups as well as other disruptors of the digital world. Cuscal has agreed to sell 86400 to NAB.
The acquisition was approved by regulators, shareholders, as well as The Federal Court, and in May 2021 the merger was finally completed with the former CBA chief executive Philippa Watson in charge.
Five employees, both current and former who spoke to The Age and The Sydney Morning Herald on the condition that they remain anonymous to ensure their employment, said it was not easy sailing. Some employees, specifically those from 86400 were skeptical about the acquisition at the beginning and soon realized that their fears had come to fruition after the two firms merged.
“Instantly it was evident that even though this was marketed as a merger that wanted to preserve 86400 personnel and systems, the reality was more like ‘we purchased those people as well as the infrastructure and would conduct different things,” said one former employee of 86400.
“We were able to see that the takeover was happening and it was not a pleasant environment that I could work within… The only thing I could do was could not get out fast enough, and the majority of people were feeling the same.
“The choices they’ve taken aren’t ones we’d have made.”
Another employee told me she enjoyed the company from the time she joined, but things changed when the company was purchased by NAB.
“This took place as the result of an NAB takeover. They needed the technology … It was not about the people or the method of disrupting this market” She said. “They made use of an environment where all Neobanks were in danger and then they removed us.”
Employees claimed that the main cause of tension was a clash in culture between the 86400 start-up mindset that aims to disrupt the banking system and the traditional bank mentality.
“86 400 staff members felt deceived,” said one. “The main objective of 86400 was to do more successful than the big four. Then they were sold by one of the major four. It was a culture shock for the people who invested their time into the company. It became extremely harmful.”
After the merge, everyone but one member of the initial leadership team have left the merged Ubank as one bank employee described as an “mass departure”.
In response to claims by former employees as well as the claims from former staff members, an ubank spokeswoman claimed that they have expanded their technology, banking and service teams , and have recently seen a rise in scores from employees on engagement.
“In the last few years, ubank was able to experience significant expansion and our staff has nearly tripled in size,” she stated. “We’re thrilled of the group we’ve created as we continue to maintain our steady growth path.”
A former ubank employee who left the bank as well, expressed his frustration that unclear decisions were made regarding how customer accounts were moved to the 86400 technology platforms.
The man stated that the work took months prior to that transfer onto 86 400’s platforms, with the intention to make the transition as simple as is possible for the customers. There were a variety of plans developed, such as encouraging customers to make sure their passwords as well as their postal address are correct to ensure the new debit cards could be delivered to the correct address.
New debit cards required to sign into the app. users who did not receive them were unable to access their accounts on their phones, even customers who are located overseas.
“A significant amount of effort was put into discover what information customers wanted to know about when and whether their accounts were moved,” said the former employee. He says that most of this research wasn’t utilized.
“The main reason for this is that they began shifting customers based on the ease of access it provided to Ubank.”
The calls went out’
The process of moving accounts, often known as an upgrade, started around the middle of the year. customers being transferred in groups. It wasn’t long before customers to experience problems.
In November, Ubank’s social media pages were inundated with complaints from angry customers who couldn’t login to their account or had difficulty accessing their funds.
In January, ubank tightened the privacy settings for the Facebook site, preventing comments from customers. They also hid the issues that were open to the public. However, many customers complain on Twitter especially about the lengthy wait to speak to someone in customer support.
“They did not have the resources to do it,” said an employee. “The calls went off.”
The process of migration was put on hold during the Christmas period, while ubank was attempting to recruit 170 new employees working in customer service roles to assist customers transitioning onto the new platform to “support the bank’s expansion” A spokeswoman for the bank said. The process will resume soon.
The bank’s mortgage and deposit balances are increasing faster than the general market rate of growth She said that the bank has been able to keep its existing customers , while accepting “thousands” of fresh customers each week.
“Incredible amount of stress”
After Grant failed to log in to the account, he reread the email that stated it would send him an additional debit card. There was nothing he had received. It was difficult to contact anyone on the helpline of UBank.
“It was a deadlock. It was impossible to log into and use your card” the man said.
He made a complaint to his local Australian Financial Complaints Authority, which led ubank to get in touch with Grant. In the course of this the bank shut down his account and later claimed it was due to an “manual process error” in a written letter. The letter included an apology to Grant for this interruption.
Grant needed to open a new bank account before he could get access to the account, he transferred his funds to a different bank. “I was no longer a fan of them,” he says.
Ubank provided him with $250 as compensation for goodwill with the condition that not to discuss the matter to any third parties. Grant has informed the bank they don’t need money and He wants an apology to all clients who were affected.
“What I wanted is an apology in public to the customers for this royal mess. There is a lot of savagery everywhere they go, yet the bank hasn’t issued an email to customers to apologize. CEO has remained in silence,” he said.
“I recognize that people do have mistakes, that’s fine … however, it’s how you handle the mistake that is a reflection of the tenacity of the organization and I’m afraid they’ve been sleeping at the wheel in this instance.
“You are dealing with other people’s lives, finances, and money. It creates a tremendous amount of anxiety… It would have been nice to have loved to have seen some accountability or accountability from the CEO, to say we have failed our customers here.”
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