TSB suffered a major IT failure in 2018 (pic: Terry Murden)
TSB’s former chief information officer, Carlos Abarca, has been fined £81,620 for failing to adequately manage an IT migration that caused widespread disruption for millions of customers.
The fine, imposed by the Bank of England’s supervisory arm, the Prudential Regulation Authority, is a pointed attempt at making the banks’ senior managers directly accountable for their actions.
Its 35-page report into the reasoning behind the fine warned that Mr Abarca’s failings had implications for financial stability.
While Mr Abarca is the only TSB executive to be personally held to account or the 2018 IT fiasco, its chief executive at the time, Paul Pester, was forced to step down.
He joined TSB as its chief information officer in October 2015 and co-led a project aimed at “designing and managing the migration programme” following its acquisition by Sabadell, the Spanish bank, for £1.7 billion that year.
However, problems emerged when the new system went live, with many of the 5.2 million customers locked out of their accounts and chaos at its 550 branches, digital and telephone banking.
Sam Woods, the BoE deputy governor at the PRA, said Mr Abarca was fined because his “management of a key outsourcing relationship fell below the standard we expect”.
The PRA said Mr Abarca agreed to resolve the matter, and therefore qualified for a 30% reduction in the overall fine, which would otherwise have been £116,000.
Mr Abarca left TSB in 2019 but joined Spanish bank Sabadell – TSB’s owner – as its chief technology officer. He is understood to have left Sabadell earlier this year.
TSB was fined £48.6m in December by the PRA and Financial Conduct Authority over the botched IT platform migration that locked millions of its customers out of their accounts.
The bank updated its IT systems in April 2018, but it took until December that year to return to business-as-usual. The meltdown reportedly cost the bank £415m.