Opinion

Flop of the Month: TSB's handling of bungled IT upgrade a recipe for reputational disaster

When a national newspaper runs a live blog about a failed IT upgrade at your company - affecting millions of customers - you know you have problems.

by Ian Griggs / April 26, 2018

TSB CEO Paul Pester's appeared to jump the gun with his assertion that all was well at the bank (image via tsb.co.uk)

The process of undertaking a major IT system upgrade for any large company or public-facing organisation is always fraught with danger.

But when TSB told 1.9 million customers last Friday that they would be unable to access their online accounts until Sunday evening due to a scheduled upgrade, it had all the ingredients of a PR disaster and reputational crisis rolled into one from the outset.

By Tuesday, irate customers were still unable to access their money due to the bungled upgrade and the bank’s social media accounts and staff in high street branches were inundated with complaints.

TSB CEO Paul Pester said on Tuesday that he was "deeply sorry" and, by Wednesday, he had taken to Twitter to claim that all was well, as the Guardian newspaper began a live blog about the unresolved crisis.

Our mobile banking app and online banking are now up and running. Thank you for your patience and for bearing with us.
— Paul Pester (@PaulPester) April 25, 2018

Not so, said TSB customers who tweeted him angrily throughout the morning to complain that their access to online accounts was still severely limited.

@TSB I get married in 10 days, so I’m sure you can imagine I have a lot to pay for. My money is in a savings account which I can’t access! I don’t have telephone banking set up, so they won’t be able to help and I work in a rural location with no branch. #bridezilla #TSBFAIL
— Lorna McHale (@LornaMcHale1) April 25, 2018

By Wednesday evening, Pester had to backtrack, admitting that only 50% of customers could access internet banking.

Then, in a statement from the bank, Pester said:

"As we moved over to our new banking platform last weekend, the landing was an incredibly bumpy one for our customers, and for that I am truly sorry. This is not the level of service that we pride ourselves on providing – nor is it what our customers have come to expect from TSB.

"Customers can rest assured that no one will be left out of pocket as a result of these problems. To begin to put things right, we will be waiving all overdraft fees and interest charges for all of our retail and small business customers for April."

He shifted the blame on Radio 5 Live this morning (Thursday), saying that TSB’s IT provider (parent company Sabadell) had told him it was fixed, but clearly that wasn’t the case.

However, he followed up by saying he had now taken personal control, and that a team of experts from IBM were landing at Bristol at 8am this morning to address the problem.

TSB could face hefty compensation claims if its customers have lost money as a result of the foul up, but the reputational cost of customers leaving the bank for its competitors could be far higher.

To add to the bank’s woes, it is now facing fines from the regulator, as well as an investigation by the Information Commissioner’s Office after some customers reported being able to see other customer’s details when they logged into their own accounts, in a suspected data breach.

The result of either could see the bank face further negative headlines in the near future.

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