UK regulators fine TSB £48.6m over “operational resilience failings”
The UK’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have fined TSB Bank a total of £48.6 million for “operational risk management and governance failures” relating to an IT systems update carried out in April 2018.
The FCA states that following the update, while the data for the bank’s corporate and customer services was migrated successfully to the new IT platform, the platform “immediately experienced technical failures” leading to “significant disruption” in TSB’s banking services, including branch, telephone, online and mobile banking.
It adds that all of TSB’s branches and a “significant proportion” of its 5.2 million customers were affected, and that it took until December 2018 for the bank to return to business-as-usual. The regulator says TSB “has paid £32.7 million in redress to customers who suffered detriment”.
Mark Steward, the FCA’s executive director of enforcement and market oversight, says: “The failings in this case were widespread and serious which had a real impact on the day-to-day lives of a significant proportion of TSB’s customers, including those who were vulnerable.
“The firm failed to plan for the IT migration properly, the governance of the project was insufficiently robust and the firm failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”
The bank has been fined £29.7 million by the FCA and £18.9 million by the PRA. TSB agreed to resolve the matter with the regulators, qualifying the firm for a 30% discount on the total penalty, which would have otherwise been a combined £69.5 million.