Icesave Cash Back

Published on 29 November 2008 in Money, banks, credit crunch, Icelandic banking crisis, Icesave, money

So about two months ago, a substantial amount of my money ended up stuck in the British operation of a failed Icelandic bank, known in the UK as Icesave.

Well after a bit of a wait – and nowhere near as long as most people originally expected – my cash has now been returned, meaning my current account hasn’t been so full since the day I had to assemble cash together to write the deposit for my house!

One of the reasons the process was so quick was that the Financial Services Compensation Scheme (FSCS) decided that one of the easiest ways to get money back to people from a failed online bank, was to do it using the failed back’s own online system. To that end, they took the Icesave banking system offline, and re-wrote chunks of it to allow them to automate the process.

For the customer, when time case to claim for the cash to be refunded, it was a mere case of clicking a few buttons and agree to a declaration that you’ve passed the buck to the FSCS to chase the Icelandic government for the cash which should be provided by the Icelandic banking protection scheme. Once all the buttons were clicked, and repeated for each different bank account, it was a mere case of waiting a few days for the cash to be returned to your normal bank account, via the online banking system’s normal withdrawal mechanism.

All in all, quick, simple and impressively effective. And no doubt a lot cheaper than processing lots of paper forms that would have resulted from using a traditional claims process.

Online banking revolutionised many aspects of the banking sector. It’s good to see that revolution is hitting failed banks too.

Although really, it’s probably better if we don’t have any more failed banks for a while…