An offer of help from Lloyds Banking Group, its former owner, has apparently been declined by TSB during the early stages of an IT meltdown that left approximately 1.9 million online customers not being able to access their accounts.
According to a report in the Financial Times, on the morning of the 23rd of April, TSB was contacted by Lloyds after it became clear that a transfer of accounts and customer data to a new IT system had badly gone wrong.
However, TSB turned down the said offer, despite the fact that its customer information was being transferred from a Lloyds system to one that is designed by the Spanish bank Sabadell, its current owner. TSB was spun out of Lloyds in 2013. However, it had continued to pay for the use of its IT systems.
Nearly a week into the said crisis, TSB was able to draft in a team from IBM to help in solving the problem, after Paul Pester, the chief executive, admitted that the bank was having a hard time to fix the problems with its mobile app and internet banking.
John Mann, a Labour MP and a cross-party Treasury select committee member, said that the failure of TSB to accept help was a sign that it had failed to acknowledge the scale of the problems and that the company had been “hoping to get away with it.”
Mann said to the Financial Times: “They were playing fast and loose with the customers and also with their reputation, which has been so damaged by it now.”
Around four weeks after the IT transfer, a number of customers were still reporting some problems in transferring money and accessing their accounts.
It is as not yet clear how much the troublesome IT transfer will cost TSB. The bank has insisted repeatedly that no customer would be left out of pocket as an outcome of the problems.
The bank has waived all interest charges and overdraft fees for its retail and small business customers for the month of April. It has also increased the interests that are paid out on its standard current accounts to 5 percent on balances up to a maximum of £1,500 – up from 3 percent – for the customers who do not leave the bank.
During an evidence session before the Treasury select committee, Pester was accused by the committee chair, Nicky Morgan, of being “extraordinarily complacent” after he said that the move of the bank to a new IT system had mostly been able to run smoothly.
Pester has said that he will give up a £2m bonus that is linked to the IT transfer. However, he could still receive a maximum of £1.3m in other bonuses for this year on top of an additional £1.3m in benefits, pension contributions, and basic pay.
On Tuesday, the posts on the Twitter feed of TSB suggested that the bank was still grappling to cope up with the high volume of complaints from its customers.
Lloyds refused to comment regarding the matter.
A TSB spokesperson also declined to comment regarding the refusal of the assistance from Lloyds. They stated: “Our teams have continued to work around the clock to put things right for our customers.
“Our priority has been to utilise the expertise of IBM together with Sabis [Sabadell’s IT partner] and our in-house teams to help resolve these issues.”