TSBDec 20 2022

Regulators fine TSB £49mn over tech failures

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Regulators fine TSB £49mn over tech failures
Photographer: Darren Staples/Bloomberg
ByJane Matthews

TSB has been fined £48.65mn by the Financial Conduct Authority and the Prudential Regulation Authority for an IT issue in 2018 that meant customers were unable to access their accounts.

The fine relates to an IT upgrade by the bank that was carried out in 2018 and resulted in “significant disruption” which ultimately meant customers were unable to access banking services.

All TSB branches and a “significant portion” of its 5.2mn customers were impacted by the initial issue.

The upgrade, which took place in April 2018, saw the migration of corporate and customer services data to a new IT platform. 

While this was successful, the new platform immediately experienced technical failures which resulted in disruption to TSB’s banking services, including branch, telephone, online and mobile banking.

Some customers continued to be affected by issues for up to nine months and it took until December 2018 for the bank to return to business-as-usual.

TSB has paid £32.7mn in redress to customers who suffered detriment.

In a statement, the FCA and PRA described the migration programme as an “ambitious and complex” IT change which carried a “high level of operational risk”. 

“Its success was critical to TSB’s ability to provide continuity of critical functions and safety and soundness,” the statement read. 

However, the regulators’ found that the bank failed to organise and control the IT migration adequately and failed to manage the operational risks arising from its IT outsourcing arrangements with its third-party supplier. 

Responding to the fine, TSB’s chief executive officer, Robin Bulloch said: “We’d like to apologise again to TSB customers who were impacted by issues following the technology migration in 2018. We worked hard to put things right for customers then and have since transformed our business.”

He added: “Over the past four years, we have harnessed our technology to deliver new products and better services for TSB customers.” 

The FCA’s executive director of enforcement and market oversight, Mark Steward, said: “The failings in this case were widespread and serious which had a real impact on the day-to-day lives of a significant proportion of TSB’s customers, including those who were vulnerable.

“The firm failed to plan for the IT migration properly, the governance of the project was insufficiently robust and the firm failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”

Adding to this, the PRA’s chief executive, Sam Woods said the disruption experienced by TSB “fell below” the standard the PRA expects firms to meet.

The fine was made up of £29.75mn from the FCA and £18.9mn from the PRA. 

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