TSB IT system chaos as bank cuts rope from Lloyds systems

TSB customers have experienced a weekend of problems with online banking services as the bank migrates from Lloyds Bank systems to its new core banking system.

This demonstrates the challenge traditional banks will have when trying to compete with the new smaller digitally focused players. Challenger banks don’t have legacy systems to deal with.

When TSB was acquired by Spanish bank Sabadell in 2015, it outlined its plans to move TSB IT systems, which were hosted by Lloyds, to its own in-house core banking platform, Proteo.

Proteo4UK, as it is known, was rolled out to the bank’s staff in November 2017 with a full range of banking services. It is now moving to a full roll-out. The full migration was originally scheduled for November but was put back to the first quarter to avoid potential confusion at the time of the expected interest rate rise, which would be the first for a decade.

The upgrade mean TSB no longer pays Lloyds Bank a couple of hundred million a year for hosting, and it will be able to implement its own customer-facing systems, which it couldn’t while being hosted. Proteo4UK is a version of Sabadell’s in-house core banking platform Proteo designed for TSB.

But at the weekend customers have experienced serious problems as a result of work on the migration, which was to be carried out over the weekend.

According to reports one customer was even mistakenly credited with £13,000. Other customers questioned whether some of the problems were leaving customers open to breaches.

A TSB spokesperson said: “We are currently experiencing large volumes of customers accessing our mobile app and internet banking which is leading to some intermittent issues with people accessing our services. We are really sorry for the inconvenience this is causing our customers and want them to know we are working as hard and as fast as we can to resolve this problem.”

Last year TSB CEO Paul Pester said more than 2,500 man-years of effort by TSB and its owner, Sabadell, had gone into the bank’s migration to the new core platform.

TSB is currently re-inventing itself as a challenger bank with fintech at the heart of its strategy. Migration problem s might harm the company’s reputation before it moves fully to its all singing and dancing platform. The Proteo IT platform will enable the bank to make regular product and service releases. Pester added: “The new platform will enable TSB to redouble its efforts to bring more competition to UK banking, in both the retail and SME banking markets.”

Read an interview with TSB’s CIO about the digital transform ation  here.

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