High Street lender TSB has today been slapped with £48.65million by the City watchdog for “extensive” failings during a 2018 IT update programme, which left millions of customers without access to banking services.
In a statement this morning, the Financial Conduct Authority and Prudential Regulation Authority said the bank failed to properly manage operational, governance and outsourcing risks during the IT upgrade.
The entirety of TSB’s network across the country was affected by the issues during 2018, with approximately 5.2 million customers locked out of banking services.
FCA and PRA officials said the incident showed that disruption to operations could cause “widespread damage” at lenders and it was “critically important” for firms to invest in resilience.
“The failings in this case were widespread and serious, having a real impact on the daily lives of a significant proportion of TSB’s customers, including those who were vulnerable,” said Mark Steward, FCA’s executive director of enforcement and market oversight.
“The firm failed to properly plan for the IT migration, the project’s governance was insufficiently robust and the firm failed to take reasonable care to organize and control its affairs responsibly and effectively with adequate risk management systems” doing.”
Fines for the lender include £29.75m from the FCA and £18.9m from the PRA, with an initial agreement to pay the fine qualifying the lender for a 30 per cent discount. The initial fine reached £69.5m – £42.5m from the FCA and £27m by the PRA).
PRA head Sam Woods said the watchdog would continue to expect firms to “manage their operational flexibility as well as their financial flexibility”.
“The service continuity disruption experienced by TSB during its IT migration fell below the standard we expect from banks,” Woods said.
Robin Bulloch, head of TSB, said in a statement: “We would like to apologize again to TSB customers who were affected by the issues following the technology migration in 2018.
“We worked hard to make things right for customers and have since transformed our business.