TSB

2022

$59 million fine for failed IT upgrade

On December 20, 2022, it became known that regulators Great Britain imposed a large fine on TSB bank in connection with a failed update IT of the -infrastructure, which led to massive failures.

The transition to a new banking platform at TSB was carried out in 2018. Incorrect operation of IT systems led to the fact that customers could not receive financial services in a personal format, as well as via the Internet and through telephone. An investigation report published in 2019 showed that the failure of the IT infrastructure disrupted the service of almost 2 million customers, many of whom could not use their money. It took several days to troubleshoot, however, even after that, some users continued to complain about problems.

Millions of TSB bank customers couldn't use their money

The UK Financial Conduct Authority (FCA) and the country's Prudential Regulation Authority (PRA) have now reportedly concluded that TSB Bank has failed to properly organise and oversee the migration of its information systems. In addition, operational risks associated with IT outsourcing were not properly managed. TSB was fined £29.75m by the FCA and £18.9m by the PRA Thus, the total amount of recovery amounted to £48.65 million, or approximately $59.1 million. This is 30% less than the initially assumed amount of the fine, which is explained by the bank's consent to resolve this issue.

In a statement, TSB CEO Robin Bulloch apologized to consumers who encountered problems during the update: "Then we worked hard to restore relations with customers, and have since changed the business model. Over the past four years, we have used our technology to deliver new products and better services.[1]

2018

Failed IT upgrade: loss of 12.5 thousand customers and $94 million

In June 2018, TSB losses that the bank suffered in connection with the migration of its information systems became known. The credit institution loses not only money, but also customers.

In 2015, one of Spain's biggest banks, Sabadell, acquired TSB for £1.7bn. After that, TSB launched a large-scale modernization of the IT infrastructure, which, in particular, was expressed in the transfer of customer accounts from the outdated system of the former bank owner (Lloyds Banking Group) to the new one developed by Sabadell.

TSB bank loses 12.5 thousand customers and $94 million due to failed IT systems update

The migration, launched in April 2018, was unsuccessful. More than a third of customers (almost 2 million out of 5.2 million) faced problems making mobile and online payments as a result of a software glitch.

This was followed by a wave of fraud complaints. According to TSB CEO Paul Pester, entering the British House of Commons, about 1,300 customers lost money, and the total number of attempts at fraud reached 2,200.

TSB turned to IBM for help in solving the problem, due to which the bank had already lost 70 million pounds by June 7, 2018 (about $94 million at the exchange rate for this day). The amount includes compensation for losses from alleged fraudsters and costs associated with the temporary cancellation of the overdraft fee. In addition, the company spends money to pay employees for overtime and attract additional labor and expert consultants.

TSB management also noted that 70 hacker attacks were registered in May 2018, so the bank is confident that "this is a pre-planned act of organized crime on the entire banking system Great Britain." Since the unsuccessful update of IT systems in April 2018, the company has lost 12.5 thousand customers.^[2]

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