IT melt­down at TSB due to ‘lack of com­mon sense’

Scottish Daily Mail - - News - By Lucy White City Cor­re­spon­dent

TSB bosses have been ac­cused of lack­ing ba­sic com­mon sense in a damn­ing re­port on an IT melt­down that locked two mil­lion cus­tomers out of their ac­counts last year.

Yes­ter­day’s re­port from City law firm Slaugh­ter and May said TSB rushed its tran­si­tion to a new tech­nol­ogy plat­form, fail­ing to test it prop­erly.

When the up­dated on­line bank­ing plat­form went live on April 22, 2018, chaos en­sued. Around two mil­lion of TSB’s five mil­lion cus­tomers were shut out of their own bank ac­count for weeks and on the first day waited an av­er­age of 90 min­utes for an ad­viser on the phone.

Sev­eral ser­vices were un­avail­able in branches and some ac­count-hold­ers claimed to be able to ac­cess other cus­tomers’ de­tails. By the sec­ond week, TSB

– which is owned by Spain’s Banco Sabadell and has its head­quar­ters in Ed­in­burgh – had re­ceived more than 33,000 com­plaints and fraud­sters be­gan tar­get­ing con­fused cus­tomers.

The re­port has crit­i­cised the bank’s ac­tions in the years lead­ing up to the tech­nol­ogy switch, high­light­ing poor com­mu­ni­ca­tion be­tween its board and ex­ec­u­tives lead­ing the pro­gramme.

The sys­tem still had more than 2,000 de­fects when it went live, but the board – first led by Will Sa­muel and then Richard

Med­dings from Fe­bru­ary 2018 – were only told about 800.

The re­port said that while the board had asked some ques­tions con­cern­ing the plan ‘there were cer­tain ad­di­tional, com­mon sense chal­lenges that we might have ex­pected the TSB board to raise with the ex­ec­u­tive’.

These in­cluded how the switch­ing pro­gramme was set such a tight dead­line when parts of it were seven months be­hind, whether the rea­sons for the de­lays had been ad­dressed and what ev­i­dence there was that the test­ing of the new IT plat­form would pick up pace.

Mr Med­dings has re­futed many of the re­port’s find­ings, claim­ing that the cat­a­strophic fail­ure was down to the de­sign of two data cen­tres. He said: ‘There are ar­eas where we dis­agree [with Slaugh­ter and May].’

He claimed that the law firm had out­lined a num­ber of po­ten­tial prob­lems, but had given no weight as to which ones had ac­tu­ally caused the melt­down.

When ques­tioned on whether there had been a com­mu­ni­ca­tion break­down, Mr Med­dings added: ‘I don’t think that’s wholly fair.

‘It was a very com­plex pro­gramme. The thing we missed, that was the pri­mary cause of the is­sues, was in­con­sis­tent con­fig­u­ra­tion of the

‘Com­mon sense chal­lenges’

two data cen­tres.’ The scan­dal cost TSB around 80,000 cus­tomers who switched bank and around £366mil­lion to cover the fall­out.

Among the costs, £130mil­lion went in com­pen­sat­ing cus­tomers, while the 260-page Slaugh­ter and May re­view cost £21mil­lion.

The cri­sis erupted af­ter TSB at­tempted to shift its tech­nol­ogy sys­tems from those run by Lloyds Bank, its for­mer owner, to a new plat­form cre­ated by Sabadell.

TSB had orig­i­nally been plan­ning to use Lloyds’s sys­tems un­til 2024, but the fee it was pay­ing to Lloyds was set to be ramped up from 2017.

City watch­dog the Fi­nan­cial Con­duct Au­thor­ity and the Bank of Eng­land’s reg­u­la­tor are both still in­ves­ti­gat­ing the lender.

COULD the re­port into the TSB com­puter calamity have been more ex­co­ri­at­ing?

Blinded by a drive to save money, lav­ishly re­mu­ner­ated bosses at the high street bank in­stalled a new IT sys­tem. In­cred­i­bly, they failed to test it prop­erly. And when it went live in April last year, it suf­fered a melt­down on an un­prece­dented scale.

Some two mil­lion peo­ple were locked out of their ac­counts and in a mon­u­men­tal se­cu­rity breach, hun­dreds saw scam­mers ran­sack their sav­ings.

Ten years af­ter the fi­nan­cial cri­sis, cus­tomers are still treated with per­verse dis­dain. We have to won­der: Have the banks ac­tu­ally learned any les­sons?

Daily Mail, April 25, 2018

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