UK authorities fined British lender TSB £49 million (€56 million) for a botched IT platform upgrade that shut millions of clients out of bank accounts in 2018.
According to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the IT update “immediately experienced technical failures”, causing “significant disruption” to TSB’s in-person, internet and mobile financial services.
The authorities ruled that TSB failed to appropriately organize and supervise the relocation and manage operational risks associated with its IT outsourcing strategy.
IT difficulties
In a statement, Sabadell, TSB’s Spanish owner, said that the settlement would be accounted for by TSB in the fourth quarter. The company claimed that the insurance plans of TSB and Sabadell would mitigate further impact in coming quarters.
Sabadell’s £1.7 billion acquisition of TSB in 2015 hit snags more than four years ago when IT difficulties drove up expenses. An investigation published in 2019 found that an IT crash disrupted services for about 2 million customers, halved the parent company’s profits the previous year, and was caused by moving to a new banking platform that hadn’t undergone rigorous testing.
“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”, said Mark Steward, executive director of enforcement and market oversight at UK regulator FCA.
Apologies
In a statement, TSB CEO Robin Bulloch apologised to consumers affected at the time. “We worked hard to put things right for customers then and have since transformed our business”, he said, adding that “over the past four years, we have harnessed our technology to deliver new products and better services for TSB customers”.
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