EDINBURGH is to be the centre of a new move to overhaul TSB’s computer systems in the wake of a massive IT meltdown two years ago that battered the bank’s reputation.
It is to create a new technology centre to drive forward digital banking as part of a multi-million pound investment, creating 100 technology jobs.
Edinburgh-based TSB said the centre, which will be based in Henry Duncan House in George Street from April, will be home to IT specialists, data engineers and analysts.
TSB has teamed up with US computer giant IBM which will manage the bank’s cloud platforms and run its IT infrastructure, under the bank’s supervision.
The IBM deal will channel the company’s cash points, internet banking, mobile banking and high street branches through the same cloud platform.
The IBM deal is part of TSB’s plan to spend £120m on digital over the next three years.
READ MORE: TSB set to close 17 branches across Scotland in 2020
That plan was put forward by Debbie Crosbie who took over as chief executive of TSB after Paul Pester stepped down in September 2018 as a result of the massive IT meltdown experienced by the bank in April 2018, when a core banking system migration went wrong.
A report commissioned by the bank and carried out by law firm Slaughter and May found that the board of TSB lacked “common sense” and shifted customers to a new IT platform before it had been fully tested.
The report into the 2018 meltdown found TSB repeatedly missed opportunities that could have helped the UK bank avoid the issues that affected millions of customers and cost it more than £350m.
It found the board failed to ask its contractor key questions ahead of the launch, which resulted in nearly 1.9 million customers being locked out of their accounts.
Mr Pester, who had criticised the report’s “scattergun” approach, said its findings showed TSB’s Spanish parent company Sabadell had “cut corners” with critical IT testing.
READ MORE: TSB launch banking 'selfie' app as over-55s say 'no' to mobiles
But the 257-page, £25m report also identified a litany of failings inside TSB and accused it of being dishonest about its problems in the run-up to the ill-fated upgrade.
The migration plans were meant to finally separate TSB from the IT systems owned by its former parent Lloyds Banking Group. But the report claimed its leadership failed to learn any lessons from the programme’s initial stumbles.
TSB said the new changes will allow the bank to “strengthen IT resilience and leverage higher value technology, including AI, to deliver new innovative cloud-native services to its customers.
With TSB planning to close 17 branches in Scotland, and 82 across the UK this year due to declining footfall, the bank said the new centre would help customers save and budget.
TSB’s customer banking director Robin Bulloch said: "We didn't see too many customers leave us through those difficult times and we're forever grateful for the loyalty of our customers, but we want to make sure we are a bank that appeals to new customers as well.
“What we’re seeing is more and more customers going online, and for those customers that are going to be impacted by branches that are closing, we work very closely with them to help educate them on other ways of banking, such as over the phone and online.
"IBM are a large-scale IT provider and we're very confident they will help support us in terms of building our propositions and ensuring the on-going stability of our banking platform."
The new investment was welcomed by Tracy Black, director of the CBI Scotland business group, who added: "For Scotland to punch above its weight internationally and attract vital overseas investment, we need to send out a clear signal that we're not only open for business but building an economy for the future.
"TSB's significant investment represents an important step in that direction."
Scottish digital economy minister Kate Forbes added: “We are committed to becoming a world-class digital nation and building our reputation as a digital leader.
“This is a welcome investment and will strengthen digital skills across the sector as well as further enhance Edinburgh’s reputation as a global financial technology centre.”
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