By Mark Fairlie.
The IT problem occurred in April of this year and resulted in thousands of customers having no access to their online banking services. This IT error lasted for several weeks after TSB’s attempt to move client data to a brand-new computer system failed.
Currently, TSB is still trying to fix their IT systems.
On the 3rd of September, TSB made a statement in which they apologised to the customers who couldn’t access their online and mobile banking.
Changes for TSB
The chairman of TSB, Richard Meddings, has announced that he will be acting as the executive chairman of TSB after the departure of Paul Pester. Meddings will take on this responsibility until a new chief executive is recruited.
Richard Meddings also went on to say:
“Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration. Paul and the Board have therefore agreed that this is the right time to appoint a new CEO for TSB”.
Since TSB’s IT error occurred, many critics have suggested that Paul Pester was a “dead man walking”, believing that he couldn’t recover from the large error.
The Spanish owners of TSB had watched over the new computer system as it was being built, designed, and tested.
Although TSB’s owners thought the new computer system was ready for the data transfer, it was not and the major IT error occurred as a result of this lack of readiness. Because of this, some critics have suggested that Paul Pester is merely a victim of circumstance.
IBM was recruited to help TSB resolve the IT error. Their report revealed that the new computer system hadn’t been properly tested.
MPs then named Paul Pester and accused him of being complacent, stating that he was in charge of the insufficient testing of the new IT system and therefore responsible for the error.
As a result, TSB lost £176m while 26,000 customers closed their accounts with the bank. However, it was later revealed that new customers had helped to counterbalance this by opening 20,000 new accounts.
Both TSB and Paul Pester’s reputation suffered significantly. Mr Pester announced that he would be stepping down from his role on Tuesday morning, the 4th of September.
A quick look back
In 2010, Mr Pester joined Lloyds Banking Group and later took on the responsibility of leading the launch of TSB when it separated from Lloyds the following year in 2011.
After TSB officially launched in 2013 as a standalone entity, the Spanish bank Sabadell bought the banking company in 2015.
As a result of the takeover, customer records had to be transferred from the software that Lloyds Banking Group used to Sabadell Proteo’s platform. This process only started on the 20th of April 2018
This data transfer marked the start of major problems for TSB’s customers. Many customers with TSB bank accounts reported that they had been locked out of their own accounts with others claiming that they had been granted access to confidential records.
These problems were escalated when TSB failed to promptly resolve them with the IT issues continuing for several weeks.
Following this issue, The Financial Conduct Authority (FCA) launched an investigation in June. Andrew Bailey, the chief executive at FCA made the investigation public because of “the level of public interest”.
In July, TSB revealed that their IT crisis had cost them £176.4m, creating a half-year loss for the banking firm