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TSB faces another risky IT migration as Santander eyes UK bank
TSB’s customers were moved to the in-house-developed platform of its parent, Sabadell, in a disastrous migration in 2018
Santander’s proposed acquisition of TSB would require customer accounts to be migrated from the in-house developed system of its current owner to that of its acquirer, just a few years after the dust settled on what was one of the biggest IT disasters in UK banking.
Spanish giant Santander said if it acquires TSB from fellow Spanish bank Sabadell, for £2.65bn, it will integrate it into Santander UK.
Although the bank said no decisions have been made, this would certainly involve the migration of the TSB customer base to Santander’s Partenon core banking system, and could see the disappearance of the TSB name.
In a statement, Santander said: “By integrating technology across Santander UK and TSB, Santander expects to unlock substantial operational efficiencies and support long-term profitability through a simplified, scalable digital banking model.”
In the UK, Santander acquired Abbey in 2004, and Alliance & Leicester and Bradford & Bingley in 2008. The bank’s strategy to migrate acquired customers to its Partenon core banking platform gains huge advantages by standardising operations and creating a single view of customers.
Santander CEO Mike Regnier said: “This deal accelerates our transformation, allowing us to enhance our customer proposition and invest more in innovative products and our digital offering, supported by the human touch service so many appreciate, not least in our new branch formats and enhancements across the country.
“We are fully committed to ensuring a seamless integration by leveraging our market-leading technology and significant experience. Maintaining the highest levels of service for customers across both banks will be a key priority, and we will support all colleagues through the transition, as we invest in building a stronger bank for the future.”
Migration track record
Santander’s track record of integrating acquisitions onto the Partenon platform could ensure it avoids the disaster that struck TSB customers in 2018, when the latter migrated from Lloyds Bank systems, which hosted it, to a UK version of Sabadell’s in-house-developed core system, known as Proteo4UK.
In April 2018, the migration experienced major problems. Over a five-day period, users were locked out, experienced money disappearing and some were even able to see other customers’ accounts.
All of TSB’s branches and a significant proportion of its 5.2 million customers were affected by the initial issues. Some customers continued to be affected by issues, and it took until December 2018 for TSB to return to business as usual.
The UK regulator fined TSB nearly £50m for its failures, and the bank paid £32.7m in redress to customers who suffered detriment.
It also fined TSB’s former CIO, Carlos Abarca, £81,620 for his part in the catastrophic migration of the bank’s IT to a new system.
One senior IT professional in the banking sector, who wished to remain anonymous, said: “If and when they integrate those systems, they’ll have to be extremely careful, as does everybody when they’re doing this kind of project. If they’ve got a better track record, that obviously helps, but it’s still a very difficult, complicated, risky thing to do.”
He added: “It seems TSB’s customer accounts are constantly on the move. I would have left it on its original systems.”
Read more about TSB’s core banking system migration failure
- 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 system.
- TSB failed to properly assess and manage the internal service provider that led its botched IT migration.
- A report released by Treasury Committee criticises lack of rigour in preparation for core banking system migration, but TSB says report’s content is out of date.
