High street lender TSB has been slapped with a £48.65m by City watchdogs today for “widespread” 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 had failed to properly manage operational, governance and outsourcing risks during the IT upgrade.
The entirety of TSB’s network across the country was hit by the issues throughout 2018, with some 5.2m customers shut out from banking services.
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 per cent discount. The initial penalty reached £69.5m – £42.5m from the FCA and £27m by the PRA).
Sam Woods, chief of the PRA, said the watchdog would continues to expect firms to “manage their operational resilience as well as their financial resilience”.
“The disruption to continuity of service experienced by TSB during its IT migration fell below the standard we expect banks to meet,” Woods added.
The chief of TSB, Robin Bulloch, said in a statement: “We’d like to apologise again to TSB customers who were impacted by issues following the technology migration in 2018.
“We worked hard to put things right for customers then and have since transformed our business.
TSB hit with £48.7m fine by watchdogs over 2018 IT fiasco