TSB IT fiasco cost £330.2 million and 80,000 customers

TSB IT fiasco cost £330.2 million and 80,000 customers

Challenger bank TSB has revealed that last year’s disastrous IT meltdown cost it £330.2 million and lost it 80,000 customers.

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In its annual report the bank announced the costs had forced it £150.4 million into the red as opposed to a profit of £162.7 million in 2017.

Locked out

The migration of accounts from the computer servers of its former owners Lloyds Banking Group to the system operated by new owners Sabadell went disastrously wrong in April 2017.

An estimated 1.9 million customers were locked out of their accounts, some for several weeks.

At the time the bank said the event had cost them £176 million, but the annual report has revealed the full cost was £330 million loss which also included customer compensation, additional resources, fraud and foregone income.

It was offset by a payment of £153 million by the computer supplier Sabis.

Switched

An estimated 80,000 customers switched their accounts away from the bank in the year with volumes peaking around the time of the switch – 30,000 more than 2017.

In a statement the bank said: “TSB has resolved around 90% of the 204,000 customer complaints received since migration.

TSB estimates approximately a quarter of this total would have been received in the usual course of business.

“All critical and urgent IT fixes have been applied, IT services are now stable within the range of industry performance and the majority of products are available across all channels.”

Recognition

In recognition of the extra work its staff had to go through to resolve the issues, the bank awarded each of them £1,500 in December and added that no bonuses would be paid to executives in the coming year.

Looking forward to business in 2019 it said it is committed to strengthening support for small and local businesses across the country and has a multi million pound investment programme under way to build new banking services for small businesses.

Challenging

Executive chairman Richard Meddings said: “Last year was TSB’s most challenging year.

But we enter 2019 with renewed ambition to re-emerge as the leading challenger bank in the UK – firmly on the side of the customer.

“In addition to continuing to improve our offer for consumers, we are going to make a significant move into business banking.

We have a multi-million-pound investment programme underway to help us grow our business banking offer across every town and city we serve.

Stronger

“Whilst the migration caused considerable difficulties, we’re now a stronger bank, operating on a more coherent and modern platform, and able to service more customers than ever before.

Helping local communities and businesses to thrive is just one element in being an essential part of the fabric of communities and their high streets – along with creating jobs, tackling fraud, and helping those in need through our charity partnerships.

“At a time when some banks are quietly retreating from communities, we’re proud to support local customers and businesses through our branches across the country, alongside digital and telephone banking.”

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