Tech Shutdown Blows: IT chaos cost Brit bank TSB almost £200m IT meltdown bank TSB has today admitted that the week-long outage and its aftermath have cost it almost £200m. Reporting its results for the six months to 30 June 2018, TSB said that it had made a statutory loss before tax of £107.4m due to the impact of the failed IT migration from parent biz Lloyds' Banking Group's Systems …
... it had hired 1,800 people and moved 700 existing staffers into customer-facing roles.
So that's 2,500 people in new roles.
I find it hard to believe that that could have made matters anything other than much worse.
To paraphrase "The Mythical Man-Month" very loosely: "Chucking tons more resource at a mess will merely escalate it into a clusterf__k.".
"I doubt there are more than 2,500 people in the uk with the financial tranasaction skillset required to dig tsb out of the hole."
But probably plenty with skillset to say "Your call is important to us. Please give me your number and someone will get back to you".
Probably just 1,100 of the new staff will be in new roles. 700 will replace existing roles in the IT division which have become vacant due to previous incumbents being condemned* to the hell desk (customer facing roles).
So just 1,800 "new" roles. I do agree with your escalation observation.
* a harsh but somewhat deserved punishment :)
Thanks to their shenanigans I noticed that my savings account with them was paying 0.05% interest. I went in to complain, on a day their internal systems were down. They said they could do nothing and asked me to come back another day. When I did, I was told I have to book an appointment with someone and so would have to come back again (no one told me this the first time). I finally arrived on the appointed day and, after a mix-up where I was left waiting for the wrong person finally saw someone. They explained that they could, as a special favour, up my interest to 0.4%.
Meanwhile banks are offering 3 or 4% on current accounts (up to the first £1k or so at least). so it seems sensible to open a few of them and spread things around, or at the very least ditch TSB for savings.
TSB seem to be relying on the fact that interest rates are so low that the difference in return is barely worth the effort - but they have been such a bunch of d**ks that I'm now moving out of spite.
It's gonna cost more than that...
Losing the current accounts adds up - the average value to a bank of a current account is about £200 a year according to consultants at Baringa (a web search will pull up the report). So if TSB had otherwise hung on to 20k of the 26k gross losses, for ten years, them (undiscounted) you can add £40m to their losses from the Pesterf*ck (that's like a clusterf*ck, but requires only one Pester to achieve criticality).
I suppose TSB did well to attract around 20k new accounts (were those people stupid?), but many will have swapped in purely for an incentive offered through price comparison websites (PCW) - problem is that incentive led switching brings in disloyal customers who'll leave as soon as any lock in period or incentive has expired. For most customer service businesses, the retention rates for customers coming through (eg) PCW channels is very poor, and many won't even cover the cost of acquisition (incentives, marketing, and acquisition payments to the PCW) before they flee to a better offer. It doesn't help that the PCW emails the customer at the end of the lock in saying "hey,. move your account to Otherbank plc, they've got £150 cashback on new accounts", so the channel partner actively seeks to undermine the longevity of new business it previously channeled to the provider.
For customers, disloyalty pays, although it is reliant upon most people NOT being disloyal - if everybody switched all services regularly, the incentives would have to reduce dramatically. The consequences of government price fixing to be carried out in the energy market later this year will be an interesting experiment. Good to see such socialist attitudes at the heart of the Conservative party.
Actually, to try to retain customers after the IT disaster, TSB now pay 5% interest on current account balances up to £1500, which isn’t at all bad.
Yes, the interest rate on your savings account is miserable, but most banks and building societies are like that. If you don’t check at least every 3 months whether you can get a better savings rate elsewhere, then more fool you, I’m afraid.
When I contacted them to complain back in May about my business banking service, I asked if they could commit to having the issues resolved and service stable in 6 months time.
They said no.
The "everything is fine now" show they are putting on is a lie.
Banks telling lies... who'd have thought?!?!
(I moved away from them, but in the few weeks I had left with them they made several more errors which cost me time and money)
The TSB stopped being any good when it stopped being a Trustee savings bank, when it merged with Lloyds in the '90s it neither of them any favours in terms of customer service. Since then of course, improvement has been foreign to them.
A side note Sabadell is the most expensive bank in Spain in terms of current account charges. No matter how much cash you have in there for them to use, they always find something to charge you for.
Personally, I favour cash and gold hidden in the bottom of an old filing cabinet......
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TSB is obviously bad; their reputation for poor customer service stretches back decades and only emphasised by their latest mess. I tried Barclays for a few months but they proved to be incompetent and their customer service was terrible - they tried to buy my loyalty by offering me £20 compensation for their cock-up but I never got it. Thinking of ditching the Halifax now as they too are incompetent and can't even handle a change of address causing problems with some mail going to the old and some to the new address - turned out their update process had failed to update all their systems with the new address. This also fouled up an online purchase too as my card address didn't match the delivery address. The Halifax did end up paying me compensation (twice) because they f***ed up the first time. Are all banks just as incompetent and have equally poor customer service nowadays? I don't want to jump out of the frying pan into the fire.
Are all banks just as incompetent and have equally poor customer service nowadays? I don't want to jump out of the frying pan into the fire.
Sortable data base here:
https://www.fca.org.uk/firms/complaints-data-sortable-table-2017-h1
To save you the trouble, the best performing bank with a national physical footprint is Nationwide (and whilst the board are paid too much, at least you're not being wrung out for shareholder's benefit). I moved from the crooks at RBS to Nationwide about ten years ago, and I'd strongly recommend Nationwide.
"I'd strongly recommend Nationwide"
I wouldn't. The staff in the banks don't like carrying out normal banking functions and they have massive problems with fraud in their call centres apparently.
E.g. They have withdrawn Bill Payments from Telephone banking and now only allow such payments to be made online as they are more "secure". When you drill down into this you find that it is, for them as it mitigates their loss as they will consider any payments made via this system as being made by you. You cannot contest fraud (even if you've been hoodwinked). They learned this from Santander.
Things obviously got pretty bad in the call centre because they even withdrew funds transfers from available services. Y'know when you transfer money between your own accounts linked under your customer number (savings to current account, etc.) When I asked why; "increased instances of fraud" on internal transfers? Yeh right. - Scaling back of telephony services is the correct answer.
Finally I went into a branch to withdraw £100 which I wanted in £10 notes for Chrimbo card fillings. I was told that they wouldn't normally do that since there was a working cash machine outside. Helpful eh?
I could give many more examples of where Nationwide were obnoxious for no reason or just plain incompetent but all banks are. Every single last one of them.
Since January 2018 I have had my daughter TRYING to close her account in Reading, Berks, but can NOT get any action from them!
For myself, I have been trying to put a "stop order" on a cheque issued SIX week ago - to buy some "Ernie Bonds" - but can't get any response out'a them even though the cheque seems to have gone astray & has not been presented!
Bloody hopeless shower of shit !
You do realise that Nationwide are a building society, and not a bank, and so the “shareholders” who benefit from their success are in fact you and all the other members with accounts!
(I do agree that many of their execs get paid disproportionately far too much, however. There really is virtually no justification for anyone to be paid more than 20 times more than the least well paid job in their organisation, in any organisation.)
Well, that was the pitch
That's the basic premise of "fintech", but fintech businesses get to skip the tedious business of migrating existing business from a legacy platform. At least to start with - it will be interesting to see how they fare when they've been around long enough to have that problem, though I expect hilarity will ensue (unless you're a customer).
"fintech businesses get to skip the tedious business of migrating existing business from a legacy platform."
Or the tedious business of supporting actual customers - those awkward people who want to save or borrow money, not the purchasing managers the sales people schmooze with.
it will be interesting to see how they fare when they've been around long enough to have that problem, though I expect hilarity will ensue (unless you're a customer).
You'd be quite right on that. There's a precedent in the energy sector. The incumbents have lots of complaints, and a reputation for shite service. The newcomers look a lot better. But as they grow, the OFGEM complaints data shows that advantage evaporates. As a newcomer, you have a clean, small, accurate customer database. Your management structure is tight, decision making agile. Your CRM is basic, lean and easily modified, likewise your business processes. As your buisness grows, so does the complexity. Your data becomes progressively dirtier. You start to accumulate those hard-to-serve customers. As a bigger business your management become more remote from the customers. You start to hear customers demanding a more capable level of interaction. Your CFO tells you you need SAP. Government start to press you to talk to them, absorbing very high skills resources. And before you know it, you have the same level of cost, service, performance and reputation as those hairy arsed incumbents who you thought you were taking on.
I’m stumped, I really am. As the boss of a bank how much do you have to fuck up the economy before anybody gives a fuck.
It’s like everybody can see the problem, but the coercion and corruption is so pervasive that it’s just allowed to happen. There’s not really any attempt to even make an effort to counteract it.
If you look back through different nations economic history and balance of industrial distribution you can see which periods where the oversight, volume and
Influence happened to coincide with macroeconomic and world history.
The stupidity of it all is that, if that instead of focusing on ever more complex ways of stealing from the hard of thinking, the asymetric flow of money and the failure to invest in anything worthwhile and then they wonder why they are less popular than smallpox.
It just doesn’t make sense. There’s a stampede to exit every major institution and it’s still head in the sand and act like greedy twats without conscience.
I’d love to sit in a board meeting for anthropological reasons to see the type of individual that must exist that just seems to anachronistic to modern society.
I’ve noticed that there was a real nasty side to character, life and each other which doesn’t seem to be prevalent in the more youthful. #thereturnolaussezfaire
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