As PR disasters go, TSB’s online banking crisis/chaos (both fit) is up there with the worst of them. However, as the bank counts the cost of its IT meltdown and the damage caused to its brand, the whole debacle has raised another issue: Just how reliant are we now on technology? Are we equipped to deal with things when the technology goes wrong?
How did it all go wrong for TSB?
What began as a planned upgrade – the shutdown of various services, including online banking, transferring money and making payments, for just over 48 hours on a weekend – has become an unmitigated disaster for the bank.
TSB’s 5 million customers will have been inconvenienced by the upgrade but the vast majority are likely to have been completely understanding. People appreciate that this sort of work is necessary from time to time. Similarly, the public recognises that upgrades will make online banking even more secure.
However, customers’ understanding and appreciation began to be tested by the Sunday evening as it emerged that the upgrade hadn’t gone exactly to plan. The process had involved moving 1.3billion customer records to a new system. The old system, belonging to Lloyds, TSB’s former parent bank, was to be replaced by a new system managed by new owners, Sabadell.
The upgrade was intended to save the bank up to £100million a year. The resulting chaos may end up costing TSB a lot more in the long run.
As the system was ‘switched on’ customer stories of problems quickly came to light. Even anecdotally, this appeared straightaway to be something greater than the type of glitches that have been known to occur with online banking.
A customer checking her account balance, expecting it to be overdrawn, instead found it showing as in the black – to the tune of £13,000. Another customer found his own accounts alongside three accounts belonging to another person. These accounts had over £46,000 in them – and account numbers, sort codes and access to transferring money were all available.
How did TSB deal with the issues?
TSB at first responded by saying that it was dealing with the isolated ‘access issues.’ However, despite claims that the issues were largely fixed, and that problems were only ‘intermittent’, customer complaints rumbled on.
The issues left some SMEs unable to manage transactions or to pay their employees. Some customers had their cards declined whilst shopping or abroad on holiday. Despite, the bank claiming on several occasions that problems had been resolved and everything was up and running, they later were forced climb down and admit that they were wrong.
In a moment of cringe-worthy comedy timing, TSB’s parent bank, Sabadell, posted a message on its website declaring that the IT upgrade had been successful amid all the chaos. CEO, Paul Pester, although praised for showing a human side and facing the music with the media, has been left with much egg on his face in what was a bruising week for the bank.
How can we avoid this in the future?
For businesses and customers alike the whole sorry TSB episode serves as a timely reminder of the potential problems that can arise from being too reliant on technology.
Businesses should be mindful how costly IT system issues can be. You could argue that the greater damage has been caused by TSB’s handling of the problems rather than the problems themselves. Either way, businesses must do all they can to ensure a similar situation happening to them. The damage to a brand can be catastrophic.
For consumers and customers, it raises questions too. Should we always have tangible money available if this happens again with other systems? We are increasingly moving towards a cashless society – do we need to slow down on this? Finally, this can serve as a wake- up call too. As an example, it is now perfectly possible for our entire work and leisure lives to be contained on our smartphones. What would we do if the system crashes, or we lose our phone?