TSB’s IT boss ‘kept board in dark’ ahead of tech meltdown
TSB Bank’s head of IT reportedly failed to warn board members about “shortcomings” with the testing of a new technology system days before it suffered a huge meltdown.
TSB is facing a lengthy investigation by City law firm Slaughter and May into the botched rollout of a new IT system that caused nearly 2m customers to lose access to online banking in April last year.
Read more: TSB Bank facing heavy criticism after investigation into IT meltdown
The findings of the probe, due to be published on Tuesday, will accuse IT chief Carlos Abarca of making an “ill-judged” assessment of the company’s readiness to go ahead with the launch, Sky News reported.
Abarca is said to have been named and shamed in the report for failing to escalate concerns about the IT upgrade, which was intended to migrate millions of customers from its old Lloyds Banking Group system to one designed by Spanish owner Sabadell.
Sources said Abarca’s move in March this year from the role of TSB’s chief information officer to chief technology innovation officer was significant because he was no longer subject to the City watchdog’s Senior Managers’ Regime (SMR).
The SMR, introduced by the Financial Conduct Authority in 2016, means executives in banking and insurance can be held personally responsible for their actions.
However, it is not clear whether Abarca’s job move was designed to protect him from the potential consequences of the meltdown, which cost chief executive Paul Pester his job and TSB roughly £370m in compensation and expenses.
It comes amid reports that Sabadell refused to help Slaughter and May with its long-awaited inquiry, meaning the probe only looked into the Spanish firm’s tech subsidiary Sabis.
“Sabadell informed us early on in the process that it would not provide documents to assist our review,” the report states, according to the Sunday Times.
A source close to Sabadell told the newspaper it was “right” that the Spanish firm had steered clear of the investigation, as the migration was Sabis’s responsibility.
The report is said to be highly critical of TSB’s board. It is also thought to criticise the bank and Sabis for being slow to provide documents.
Read more: TSB returns to growth after IT meltdown
“We have now received the review into TSB’s 2018 migration carried out by the law firm Slaughter and May,” a TSB spokesperson said.
“The TSB board is reviewing it, sharing it with UK regulators and will provide a further update in due course.”
Main image credit: Getty