Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

City watchdog to investigate TSB over IT failure that left thousands out of pocket

Treasury Committee chair 'deeply concerned' by bank's communications around IT shambles

Caitlin Morrison
Wednesday 06 June 2018 08:11 BST
Comments
The challenger bank has been under scrutiny for weeks since the IT problems started
The challenger bank has been under scrutiny for weeks since the IT problems started (Reuters)

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

TSB will be investigated by the financial watchdog over a recent IT failure at the challenger bank, the FCA confirmed on Wednesday, as chief executive Paul Pester prepares to face another grilling from MPs about what went wrong.

Treasury Committee chair Nicky Morgan MP said she was “deeply concerned” by the bank’s reaction to the issue and the evidence previously provided by Mr Pester.

TSB’s online banking and mobile app services were disrupted for weeks earlier this year, after problems in moving the digital operation onto a new platform.

Mr Pester, along with TSB chairman Richard Meddings and Miquel Montes, chief operating officer at the bank’s parent company, Sabadell Group, appeared in front of the committee to give evidence about the tech problems in May.

At the previous session, the TSB boss failed to impress viewers, who criticised his “arrogant” attitude after he joked that he was pleased so many of the committee members were TSB customers.

Ahead of the second hearing, Ms Morgan revealed that Andrew Bailey, CEO of the Financial Conduct Authority, had written to her outlining various concerns he had about the handling of the IT problems. The FCA and the Prudential Regulation Authority have launched a separate investigation into TSB’s IT migration.

He said Mr Pester had given an “optimistic view of the services” in his evidence to the committee, and added: “[T]he current communications were perceived as poor, and could reduce trust in TSB and in the banking sector as a whole.”

Ms Morgan said: “The regulator does not make such criticisms lightly. I am deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Mr Pester to the committee.”

She said Mr Bailey’s letter would be discussed at Wednesday’s evidence session.

Mr Pester said last month that he would give up his £2m bonus as a result of the IT fiasco, and the bank has increased the interest rate on its main current account to 5 per cent in a gesture to customers. However, problems with the bank’s telephone services persist and customers continue to complain of issues with online banking too.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in