TSB Bank’s ex-chief information officer fined more than £80,000 over IT debacle
TSB Bank’s former chief information officer has been fined £81,620 by the industry watchdog for failures relating to the botched merger of the firm’s IT services in 2018.
The Prudential Regulation Authority (PRA) said Carlos Abarca, who left the bank in December 2019, “failed to take reasonable steps” to ensure that TSB managed the outsourcing for its 2018 IT migration programme.
Abarca had responsibility for TSB complying with the PRA’s outsourcing rules as part of the senior managers regime, the PRA noted. In particular, he was responsible for the bank’s relationship with its third party supplier.
Abarca “failed to ensure that TSB had itself obtained sufficient assurance from the third party” before going ahead with the bank’s IT platform migration, the PRA said.
While the data itself migrated successfully, the platform immediately experienced technical failures.
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 following the botched migration.
Sam Woods, chief executive 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,” he continued.
Abarca agreed to resolve the matter with the PRA, meaning his fine was reduced by 30 per cent. Without this discount, the financial penalty would have been £116,600.
Abarca’s fine follows on from a £48.7m fine imposed on TSB in December for “operational resilience failings” relating to the IT failures.
Despite the hefty penalty last December, the bank reported that its profit grew in the six months to January, reflecting lending growth and interest rates.
TSB declined to comment.