TSB Bank IT System Migration Problems
In April 2018, TSB Bank attempted to migrate its IT systems from the legacy Lloyds Banking Group platform to a new system developed by its parent company, Sabadell. The migration aimed to improve the bank's digital services, but it resulted in widespread outages and significant disruptions for customers.
Key Problems
Technical Issues
- System Outages: The new IT system experienced frequent outages, preventing customers from accessing their accounts online or via mobile apps.
- Data Access Problems: Customers reported issues with incorrect account balances, missing transactions, and erroneous data.
- Security Concerns: There were instances where customers could see other people's account details, raising serious privacy and security concerns.
Delays and Postponements
- Launch Date: The migration was initially planned for a seamless transition over a weekend in April 2018.
- Extended Outages: The issues persisted for several weeks, with some problems continuing for months after the initial migration.
Management and Coordination Failures
- Lack of Testing: The system was not adequately tested under real-world conditions before the migration, leading to unforeseen problems.
- Poor Communication: There was poor communication between TSB, its parent company Sabadell, and the third-party contractors involved in the migration.
- Frequent Changes in Leadership: Changes in project leadership led to inconsistent decision-making and a lack of clear direction.
Cost Overruns
- Initial Budget: The project was expected to cost around £220 million.
- Final Cost: The actual cost exceeded £400 million, including the expenses for fixing post-migration issues and compensating customers.
Document Version Mismatches
- Inconsistent Documentation: Different versions of project documents and specifications caused confusion and errors during the migration.
- Miscommunication: Miscommunication between stakeholders about document versions led to the implementation of outdated or incorrect requirements.
Impact on Stakeholders
- Customer Impact: Millions of customers were unable to access their accounts, leading to frustration and loss of trust in the bank.
- Regulatory Scrutiny: The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) launched investigations into the migration failures.
- Reputation Damage: The issues severely damaged TSB's reputation, leading to a loss of customers and increased scrutiny from regulators.
Conclusion
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