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reported £450 million to the project, with its own internal teams set to spearhead the switchover.


The final countdown


TSB released its first product on the system – a mobile app – in early 2017. The bank’s CEO, Paul Pester, said at the time that more than 2,500 hours had gone into the core banking project. Originally planned for a late 2017 big bang launch, the bank decided to postpone the go-live to avoid the expected interest rate increase in November of that year.


Finally, on 21 April 2018, the bank was prepared to make the final switchover. It shut down a portion of its online banking services in preparation for the final few systems to come online. A series of LinkedIn posts, discovered by the Guardian and then surreptitiously deleted, showed Sabadell employees celebrating the switchover with sparkling wine for a “job well done”.


It didn’t take long for the first cracks to show. Users began to question why they were still unable to access their accounts the following day, and why the bank’s website had slowed to a crawl. Irregularities began to appear for anyone who did manage to get into their accounts. One customer told the BBC that he had been given access to someone else’s £35,000 savings account and £11,000 ISA. Another took to Twitter to ask the bank why they suddenly were in arrears to the tune of £1,128,443. Others reported being able to see multiple accounts, including sort code and account number information.


It wasn’t just consumer accounts that were affected. Businesses suddenly found themselves unable to process vital payments to employees, suppliers and manufacturers, among others. “I’m having an absolute nightmare,” one business owner reported. “I’ve got two accounts with TSB, both business accounts. My business has literally stopped. I don’t know what money’s coming in, what’s going out. When you’re running a small business, every job counts and it is just a nightmare.”


TSB issued an apology, claiming that it had fixed the issue by the end of play on Monday. “We’re really sorry that some of our customers experienced problems accessing our mobile app and internet banking yesterday evening,” it wrote. “Both of these services are now up and running again.”


Despite this claim, scores of customers took to social media complaining that their accounts were still experiencing issues. TSB held fast to its claims, continually telling users: “Unfortunately, there are some intermittent problems affecting this service so please bear with us. We’re working as hard as we can to resolve this.”


CEO Pester took to Twitter in the early hours of 24 April to reassure customers. “Our mobile banking app and online banking are now up and running. Thank you for your patience and for bearing with us,” he wrote. “I’ve just resurfaced after 48 hours with my teams who have been working as hard and fast as they can to get our services back up and running. This isn’t the level of service that we pride ourselves on


providing, and isn’t what our customers have come to expect from TSB, and for that I’m truly sorry.”


The wave breaks


By 25 April, TSB admitted that as many as half of its five million customers could not bank online due to capacity problems. It added that its internet bank was operating at only 50% capacity, although its mobile app was at 90% capacity. National news media began to jump onto the dogpile. The Daily Mail ran with a headline declaring that TSB’s name must stand for “Totally Shambolic Bank”.


As the issues ran into a second week, TSB called in specialist help from IBM engineers, given a deadline of 28 April to fix the problems. Reports on social media following the date revealed that customers were still having issues, and that a Java error appearing on the bank’s error messages were revealing damaging information about the state of the bank’s innermost code.


Ground zero for the bank occurred across its branch network, where “emotionally and physically” exhausted staff members were being sent home to avoid breakdowns while dealing with customer queries, complaints and pleas for help. GoCompare, a UK comparison website, revealed around this time that bank account comparison on its website had increase by more than 200%.


Compensation payments begun to be issued on 30 April, with Moneysavingexpert.com reporting that a couple in Glasgow received £25 each for “inconvenience caused”. If each affected customer is offered a similar amount by the bank, TSB could end up shelling out £47.5 million minimum.


Nicky Morgan, chair of the Treasury Select Committee, wrote to Pester demanding answers from the bank over its meltdown. Sam Woods, Bank of England deputy governor and head of the Prudential Regulation Authority, described TSB’s problems as “self-inflicted wounds”.


Recovery


With problems still being reported by customers nearly three weeks into the switchover, TSB turned to one of the UK’s most prestigious law firms, Slaughter and May, to investigate the problems and to help prepare the bank to deal with impending probes from regulatory firms.


Pester was summoned to face a committee of MPs on 2 May and explain the ongoing problems at the bank. He told the Treasury Committee that 40,000 complaints had been received after unacceptable customer experiences, yet argued that the migration had still been successful. TSB bosses stressed that the work had not been rushed through to get certain financial incentives. At the heart of the problem was the inability of testing environments to properly predict the capacity of the system upon go-live.


The #TSBMeltdown (as it has been dubbed on Twitter) is set to go down in history as a case study for improper core banking replacement, and has arrived at a time in which a lot of major


www.ibsintelligence.com | © IBS Intelligence 2018


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