UK financial regulators have fined TSB more than £48 million after the bank failed to manage outsourcing risks relating to its IT upgrade programme.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) said that technical failures in TSB’s IT system resulted in customers being unable to access banking services.

In April 2018, the bank updated its IT systems and migrated its corporate and customer services data onto a new IT platform.

While the data was moved successfully, the platform experienced technical failures which led to what the authorities described as “significant disruption” to its banking services, including branch, telephone, online, and mobile banking.

All of the bank's branches were impacted by the IT issues, with a significant proportion of its 5.2 million customers also affected.

The FCA said that it took around eight months for the bank to return to business-as-usual.

TSB has paid out £32.7 million in redress to customers who suffered detriment.

“The failings in this case were widespread and serious which had a real impact on the day-to-day lives of a significant proportion of TSB’s customers, including those who were vulnerable,” said Mark Steward, FCA executive director of enforcement and market oversight. “The firm failed to plan for the IT migration properly, the governance of the project was insufficiently robust and the firm failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”

TSB was fined £29.75 million by the FCA and £18.9 million by the PRA. As it agreed to resolve the matter the bank qualified for a 30 per cent discount on the overall penalty.

Without the discount TSB would have faced a combined fine of £69.5 million.

"The PRA expects firms to manage their operational resilience as well as their financial resilience," said Sam Woods, deputy governor for prudential regulation and the chief executive of the PRA. "The disruption to continuity of service experienced by TSB during its IT migration fell below the standard we expect banks to meet."

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