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ICO and finance regulator assess TSB IT blunder

Customer data was exposed during migration to new core banking platform

The Information Commissioner’s Office (ICO) and the Financial Conduct Authority (FCA) are assessing the IT meltdown at TSB that led to some customer accounts being seen by other customers.

It is inevitable that the FCA would investigate the serious problems experienced by the bank when it was migrating from the Lloyds Bank IT systems it was using to its new core banking platform, and the ICO is in contact with TSB after it was revealed that customer data had been exposed.

Customers have claimed that while the migration was taking place over the weekend of 21-22 April, some customers could see the accounts of other people, while others were mistakenly credited with thousands of pounds.

According to the Financial Times, the ICO said it is making enquiries and the FCA said it is liaising with TSB.

The problems occurred as TSB was moving customer accounts from the systems of Lloyds Bank, which had been hosting the accounts for TSB, to the new core banking system Proteo4UK, a UK version of the system developed in-house by Spanish banking group Sabadell, which owns TSB.

When Sabadell acquired TSB for £1.7bn in 2015, it announced its intention to migrate the bank to its own proprietary Proteo in-house IT platform, saying this would cut costs by £160m a year and offer an opportunity to build services.

The bank has also reinvented itself as a challenger bank, with the latest technologies at the core of its strategy. But, unlike most challenger banks, TSB comes with a large IT legacy.

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.”

Read more about TSB migration

The bank has spent thousands of man-years and millions of pounds on the migration, which has been done in stages. Proteo4UKwas rolled out to the bank’s staff in November 2017 with a full range of banking services, with the full roll-out slated for first quarter of this year.

TSB has gradually been adding functionality to the system. For example, a year ago it launched the first fruits of its new core banking system with a mobile app for Android and iOS devices, developed via the Proteo IT platform. The platform will enable the bank to make regular product and service releases.

Moving a bank as large as TSB from legacy systems, albeit from a different bank, is a highly complex operation.

Big banks have thousands of systems providing current accounts, savings accounts, mortgages, loans, and so on. The banking architecture comprises thousands of systems performing different tasks which are connected. A problem with one system can cause outages for many of a bank’s services.

See the diagram of the complexity of IT at a large bank in this article, which depicts all the individual processing components and their interdependencies in a single mortgage system at a large, full-service retail bank. 

This complexity means problems are hard to avoid, and the large amounts of customer data held in various systems means issues can go much further than just system downtime.

Read more on IT for financial services

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