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TSB IT fiasco: a corporate governance failure

Laura Miller discovers the corporate governance failings that led to the TSB IT crash, which left customers locked out of online accounts and drew regulatory attention.

Not since the 2008 financial crisis has corporate governance in banking been so called into question as in the last two years of IT-related blights. UK bank customers suffered 265 IT failures between October 2018 and September 2019, according to Financial Conduct Authority (FCA) data – stranding them without access to cash equal to five times every week. In 2018, when bank technology outages more than doubled, Megan Butler, director of supervision at the FCA, said: “The true test of the resilience of UK finance is not the absence of incidents, it’s how well incidents are managed".

She was speaking after a particularly glaring example of the sector’s problems; the TSB IT upgrade “fiasco” in April 2018 which cost CEO Paul Pester his job and the bank £330m for customer compensation, fraud losses and other expenses.