12,500 TSB customers desert after IT meltdown


TSB chief executive Paul Pester has admitted the bank has lost around 12,500 customers since its IT systems crashed in April.

Speaking in front of the Treasury select committee of MPs, Dr Pester also revealed that up to 1,300 TSB customers suffered financial loss due to fraudsters following the IT system failure.

Vulnerabilities in the bank’s IT system as a result of the crash generated 10,600 “fraud alerts.”
Around 2,200 had amounted to “actual attempts” at cyber fraud.
There have been 93,700 customer complaints lodged since the IT systems failure on April 20.
Dr Pester, accompanied by TSB chairman Richard Meddings and chief operations officer Miguel Montes apologised several times to MPs for the bank’s failings and the havoc wreaked on customers.
“I am deeply sorry to say that the issues we created as a consequence of migration were an opportunity for criminals to target TSB customers,” he said.
TSB began the planned IT upgrade work on 20 April – transferring 1.3 billion customer records from old parent company Lloyds to a system created by new Spanish owners Sabadell.
Dr Pester told MPs the bank had been “overwhelmed” at seeing 70 times the level of expected fraud attacks, well above the four times normally anticipated with this type of systems migration.

Image: TSB chief executive Paul Pester pictured giving evidence to MPs
The committee accused TSB bosses several times of misleading both parliament and the bank’s customers at several stages since the IT debacle unfolded, but Dr Pester insisted there was “no evidence” he or TSB had intentionally misled anyone.

Committee member John Mann asked the bank’s bosses whether “heads would roll” in the wake of the disruption.
TSB chairman Richard Meddings replied the bank would await conclusions from an internal investigation being carried out by law firm Slaughter & May, before any punitive action is taken.
“Where there is culpability, we’ll act on it,” he said.
The Slaughter & May audit is looking at how the IT system’s migration decisions were made within the bank and who made them.
It will also assess the bank’s response to the migration failure and how the TSB board has handled the subsequent disruption.
The Financial Conduct Authority (FCA) announced earlier it was investigating the bank over its systems debacle.

Image: Andrew Bailey of the FCA
Speaking to the committee, FCA chief executive Andrew Bailey said the watchdog had “quite frank conversations” with TSB about their level of communication over the meltdown, which the FCA had been unsatisfied with.

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Mr Bailey said: “A more straightforward recognition of what the situation was would have been helpful.
“They are in a hole and they have got to get themselves out of this hole,” he said.

Source: Sky

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