Page 205 - Flip Banks TG
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Since splitting from Lloyds, in 2013, TSB has rebuilt itself
from the ground up. This has been done on the basis of a
challenger bank supported by a structure embedded in a
long history of being a major industry player.
TSB’s focus is consequently, clear cut. It is a challenger bank
whose focus long-term, is on its retail customer base. Short-
term it has been trying to transform itself into a real digital
organization in terms of processes and the way customers
use products and make payments.
Unfortunately, the problems of the April 2018 IT migration
to Sabadell's banking platform increased TSB's operational
risk and execution risk at the bank, as well as diverting
management attention from day-to-day business matters.
The bank also saw higher fraud activity targeting its
customers after the IT migration.
During the first half of 2018 TSB made a £115.8 million
provision for customer redress, associated remediation
resource costs, and fraud costs. Ultimately, this IT error cost
the CEO Pester his job.
Although TSB has a relatively low risk loan portfolio, its
exposure to operational risk stemming from the prolonged
IT migration issues is substantial.
