TSB IT meltdown cost bank £330m and 80,000 customers
The company lost £34m due to waived fees and charges as a result of the tech failure
TSB has revealed that last year’s massive IT failure cost the bank £330m, while 80,000 customers switched their account to a competitor.
The lender was rocked by serious tech issues in April last year after attempting to move to a new IT system, which left thousands of customers locked out of their accounts and some reporting that they were able to access to other people’s details.
On Friday, the bank reported a loss of £105.4m for 2018, compared with a profit of £162.7m in 2017, and said this reflected “the impact of the issues following the bank’s IT migration”.
The £330m total spent by TSB to address the IT failure was made up of £125m in customer payouts, fraud and operational losses of £49m, the cost of fixing the tech systems, which was £122m, and £34m in income lost due to waived fees and charges incurred because of the disruption.
The group said 80,000 customers switched their accounts away from TSB, with volumes peaking in the second quarter, when the IT meltdown took place. This was a jump from the 50,000 customers who left the bank in the previous year.
Richard Meddings, TSB executive chairman, says: “Last year was TSB’s most challenging year. But we enter 2019 with renewed ambition to re-emerge as the leading challenger bank in the UK – firmly on the side of the customer.
“Whilst the migration caused considerable difficulties, we’re now a stronger bank, operating on a more coherent and modern platform.”
The company said that while the migration to the new IT platform “caused considerable frustration and difficulties ... TSB is confident that the platform is now delivering real benefits and, importantly, enables TSB to support more customers and local businesses right across the UK”.
Looking ahead, TSB said economic and market conditions “remain uncertain for a range of reasons”, including Brexit.
The group said it is well positioned to withstand uncertainty and any potential shocks.