BoE fines former TSB Bank exec over IT failures

The Bank of England said on Thursday that it has fined the former chief information officer of TSB Bank for failings related to its 2018 IT migration programme.

In April 2018, TSB updated its IT systems and migrated the data for its corporate and customer services onto a new IT platform. While the data itself migrated successfully, the platform immediately experienced technical failures. This resulted in significant disruption to the continuity of TSB’s banking services, including branch, telephone, online and mobile banking.

All of TSB’s branches and a large chunk of its 5.2m customers were affected by the initial issues and it took until December 2018 for TSB to return to business as usual. TSB has paid £32.7m in redress to customers who were affected.

Following an investigation into the matter, the Prudential Regulation Authority has fined Carlos Abarca £81,620 for failing to take reasonable steps to ensure that TSB adequately managed and supervised appropriately its outsourcing arrangement for the IT migration programme.

It said he did not ensure that the third party’s ability and capacity were adequately reassessed on an ongoing basis or that TSB obtained sufficient assurance from the third party in relation to its readiness to operate the new IT platform.

He also failed to give sufficient consideration to whether further investigation was required before giving assurance to the TSB board as to the third party’s readiness for migration.

Sam Woods, deputy governor for Prudential Regulation and CEO of the PRA, said: "Senior managers have an essential role to play in ensuring that firms manage and supervise outsourcing effectively.

"In this case, the PRA has fined Mr Abarca because his management of a key outsourcing relationship fell below the standard we expect."