Lessons to be learned from TSB crisis

THE dust is beginning to settle on TSB’s banking crisis. However, with the Information Commissioner’s Office and the FCA having begun to make their own inquiries over the past couple of weeks, it seems as though the bank may not yet be out of the woods.

I think this episode says a few important things about the position of the UK’s financial landscape right now.

Although newspapers have weighed in with vicious condemnations of TSB’s services, I think TSB is staffed with many conscientious, effective professionals who have been let down by a difficult migration away from legacy infrastructure.

Although TSB characterises itself as a “challenger bank”, many of its services have been built on top of the platform of its parent company, Sabadell – a Spanish firm founded in the 1880s.

This is not to say that older companies will inevitably be less innovative or technically proficient. But TSB’s meltdown occurred when a large trove of customer data was migrated across from a Lloyds Banking Group platform to one operated by Sabadell. What does this tell us about the capabilities of our financial services behemoths?

I don’t want to bash banks, but I think this could be a formative moment for customers who are becoming more and more aware of the diversity of options in the alternative finance space.

Companies building streamlined products from scratch, leaning on best-inclass technology and infrastructure support, are in a good place to capitalise on the weaknesses of incumbents.

I’m confident that TSB will be able to rebuild trust in the services it provides. However, this could be a warning shot across the bows of any business relying on older systems to get by. Greg Carter is CEO of

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