Costs are Adding Up for TSB Bank
Costs are adding up for TSB Bank. In April, the U.K.-based company launched an error-riddled banking platform that affected about 1.9 million customers. TSB mobile and online users got access to other people's accounts, were charged for purchases they never made and experienced widespread difficulty accessing money. By June, some customers were still frequently locked out of their accounts.
TSB's desire for new customer-facing IT infrastructure stemmed from a split with Lloyds Bank in 2015. Despite TSB being owned by Sabadell after the move, Lloyds Bank continued to operate TSB's IT infrastructure. Last year, TSB began rolling out a project to transfer its 1.3 billion records into the new banking platform, promising customers a state-of-the-art platform.
But the IT project faced challenges from the start. Switching from legacy systems to new platforms is notoriously difficult for banks. TSB's project was also running behind schedule, according to a source in Wired. The end product apparently lacked systematic testing before it went live, according to Shujun Li, a professor of cybersecurity at the University of Kent's School of Computing. “The conversion of the systems—the data and the interface accessing the data, which links up to the banking system—clearly has not been well-tested before it went online,” Mr. Li told Wired. “For me, it's clearly a case of management, rather than purely a technical problem.”
TSB has since brought in IBM to help remedy the problem. No solution remained in sight as of June, with costs of the failed migration hitting £70 million, according to The Times.