Bank hit

TSB fined £49m for 2018 IT meltdown chaos

TSB: hit with fine

TSB has been fined £48.65m by City watchdogs for “widespread” failings during a 2018 IT update which left millions of customers without access to banking services for several weeks.

The Financial Conduct Authority and Prudential Regulation Authority said the bank had failed to properly manage operational, governance and outsourcing risks during the upgrade.

Problems began when an attempt to move data to a new computer system went wrong. TSB’s entire network, including branch, telephone and online banking was affected with some 5.2m customers shut out from banking services.

The issues were not fully resolved for eight months, and led to the departure of the bank’s then chief executive Paul Pester.

Officials at the FCA and PRA said the incident showed operational disruption at lenders could cause “wide-ranging harm” and it was “critically important” for firms to invest in resilience. 

“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, FCA executive director of enforcement and market oversight.

“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.”

The fine for the lender consists of £29.75m from the FCA and £18.9m from the PRA, with an early agreement to pay the fine qualifying the lender for a 30% discount.

Sam Woods, chief of the PRA, said: “The disruption to continuity of service experienced by TSB during its IT migration fell below the standard we expect banks to meet,” Woods added.

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