Data Centre Test Omission Blamed For TSB IT Fiasco

TSB lacked ‘common sense’ according to a report in the epic meltdown of its IT systems last year, that left half of its online banking customers unable to access their accounts.

TSB was engulfed in an IT fiasco in April 2018 when it moved its five million customers and their 1.3 billion records from a banking platform it was renting from former owner (Lloyds Banking Group) to its new ‘state-of-the-art’ platform developed by its Spanish-owner Banco de Sabadell.

A long- awaited report by City law firm Slaughter and May has now reportedly concluded that a lack of testing at one of TSB’s data centres by Sabis, the IT services arm of Sabadell, coupled with poor judgement of Carlos Abarca, the bank’s chief information officer at the time, were to blame.

IT meltdown

The IT fiasco resulted in TSB’s chief executive Paul Pester stepping down in September 2018, despite his repeated apologies to customers.

Pester had been in charge of TSB for seven years, and his resignations pleased some MPs on the Treasury select committee.

But others felt that Pester took the blame for Sabadell, and its chaotic data migration process, which cost TSB more than £400m.

IBM eventually had to be hired to help deal with the mess.

Lawyer report

Sky News has learned that the law firm’s report would charge the TSB board with having failed to address ‘common sense challenges’ about aspects of the IT migration process.

The report apparently concluded that the decision to proceed with a massive IT migration when only one of the data centres had been tested “made it impossible to identify the problems” with a new system.

One insider reportedly said that Sabis had recommended testing only one of the data centres in order to avoid interrupting ATM services for TSB customers.

The omission of one of the two sites from the performance testing process was concealed from board members (including then CEO Pester) ahead of the new system going live in April 2018.

The report apparently states that Carlos Abarca, the bank’s chief information officer at the time, was among the TSB employees who were aware of the testing omission.

Sky News reported that Abarca failed to inform board members about “shortcomings” with the testing of the new system, and that the report would argue that he made an “ill-judged” assessment of TSB’s readiness to proceed with the migration.

Slaughter and May’s report will be apparently followed by a joint investigation run by the Financial Conduct Authority and Prudential Regulation Authority, which could lead to formal enforcement action against the bank and individuals.

Spanish blame?

But it is highly unlikely that the Spanish owners or their executives will be sanctioned for the botched migration.

It should be noted that this is not the first time that the finger of blame has been pointed at Sabadell. Insiders have previously hinted that the blame should be laid at the door of the Spanish bank.

An insider previously told the Guardian newspaper that Sabadell had a disturbing lack of appreciation of the complexity of the migration.

Indeed Sabadell was reportedly warned as far back as 2015 that its ambitious plan was high risk, but Sabadell pressed ahead anyway.

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