Major report on TSB IT disaster expected soon
A damning report into the 2018 IT disaster at TSB is expected to heavily criticise executives when it is published in November
A report into TSB’s disastrous core banking platform migration is expected to be handed to the bank by law firm Slaughter and May in November.
The law firm was hired to investigate what went wrong when TSB migrated from the Lloyds Bank systems that hosted its customers’ accounts to its new in-house core banking platform.
Executives at the bank are expected to come in for heavy criticism. During the migration in April 2018, customers were locked out of their accounts, some experienced money disappearing from accounts, while others were even able to see other people’s accounts.
The report, which is said to have cost £25m, is expected to be 300 pages long.
In a statement, TSB confirmed it has received Slaughter and May’s review: “The TSB board is reviewing it, sharing it with UK regulators and will provide a further update in due course.”
TSB is likely to make the report public before new CEO Debbie Crosbie gives a strategy update on 25 November.
The April 2018 crash happened when TSB was migrating from the core systems of Lloyds Banking Group, where its accounts were hosted, to a new core banking platform from its parent company Sabadell. Proteo4UK, as the system is known, is a UK-specific version of Sabadell’s existing core banking system, Proteo.
When Sabadell acquired TSB in 2015, it said it would move customers to a new banking platform. The plan was to move customers across in stages, and Proteo4UK was rolled out to the bank’s staff in November 2017 with a full range of banking services.
Proteo4UK will support TSB in the digital banking age and enable it to challenge bigger banks by offering fintech services similar to some UK digital challenger banks.
TSB said the move to Proteo4UK would cut its costs by £160m a year. It previously paid Lloyds Bank several hundred-million pounds a year for the service.
The IT migration disaster has cost TSB hundreds of millions of pounds. These costs included compensating customers, additional resources through advisory services from companies such as IBM and Deloitte, fraud and foregone income. TSB’s former CEO of seven years, Paul Pester, also stepped down as a result of the disaster.
According to trade union Affinity, TSB’s strategy update in November is expected to reveal a plan to close 100 branches and cut hundreds of jobs to save £100m.
Mark Brown, the general secretary of Affinity, told The Guardian: “The results of TSB’s strategic review are going to be more branch closures and more job losses right across the bank. Hundreds of staff who saved TSB following its IT meltdown last year are going to be sacrificed on the altars of costs, efficiency and technology.”
Read more about the TSB IT migration disaster
- The Information Commissioner’s Office and the Financial Conduct Authority are assessing the IT meltdown at TSB that led to some customer accounts being seen by other customers.
- TSB’s very public IT problems will send shivers down the spine of IT teams at large banks that are yet to migrate to new core banking systems.
- TSB customers are still experiencing problems using online and mobile banking services after almost a week of disruption.