TSB IT meltdown results in £100m loss
Embattled bank says the ordeal has 'made it stronger'
Beleaguered bank TSB today revealed that it lost more than 100 million following the catastrophic outage that hit its IT systems last year.
The bank lost 105.4 million before tax during 2018, compared to a 162.7 million profit the previous year. This loss has been directly blamed on a disastrous IT migration in April last year which saw almost two million customers locked out of their accounts for multiple weeks.
The disaster has cost TSB more than 330 million so far, including 125 million in customer compensation, 122 million in emergency recruitment, 49 million in fraud and 33.5 million in uncollected fees.
However, the bank also said that these amounts would be mitigated by 153 million in compensation of its own, which the bank is provisionally set to recover from its IT provider Sabis. Sabis is also owned by TSB's parent company Banco de Sabadell. But plans are underway to take more control of the bank's IT from Sabis and bring it in-house, executives said.
Frontline staff who were responsible for dealing with the IT meltdown and the resulting fallout saw each of them handed a 1,500 bonus in advance of Christmas, replacing the company's usual profit-based bonus scheme. While most of the company's staff benefited from this, executives were not included in the payout.
The company now says that it has resolved 90% of the 204,000 complaints lodged by customers following the disaster, and TSB's executive chairman Richard Meddings said that the bank was stronger as a result of going through the experience.
"Whilst the migration caused considerable difficulties," he said, "we're now a stronger bank, operating on a more coherent and modern platform, and able to service more customers than ever before."
"We have a truly customer-focused team, a strong banking system that customers are starting to see the benefits of, and look forward to our new chief executive officer, Debbie Crosbie, joining us later this year."
Despite its calamities, TSB managed to increase the number of customers on its books in 2018, adding an extra 140,000 customers to offset the 80,000 who closed their accounts.
The bank said that it did not expect the migration issues to incur any more significant costs, although it is currently under investigation by the Financial Conduct Authority over its handling of the incident. The FCA has previously doled out a 56 million fine to Royal Bank of Scotland, after a similar IT collapse left 6.5 million customers locked out of their accounts.
Digitally perfecting the supply chain
How new technologies are being leveraged to transform the manufacturing supply chainDownload now
Three keys to maximise application migration and modernisation success
Harness the benefits that modernised applications can offerDownload now
Your enterprise cloud solutions guide
Infrastructure designed to meet your company's IT needs for next-generation cloud applicationsDownload now
The 3 approaches of Breach and Attack Simulation technologies
A guide to the nuances of BAS, helping you stay one step ahead of cyber criminalsDownload now