At Crisis Solutions, much of our work is with the financial sector and there is little that banks fear more than IT failure or data-breaches. These now form the basis for many of our crisis simulation exercises.
As Head of Media at Crisis Solutions I’m responsible for writing and producing the simulated news clips shown during exercise play. Typically, we divide exercises into three sections, each of which start with a video and conclude with a briefing perhaps the Board or the Regulator.
When writing this type of simulated news script there’s a sentence that crops up regularly in one form or another: ‘IT failure has a unique ability to undermine customer confidence and tarnish a firm’s long-standing reputation. It’s no longer just the IT department that takes the rap, senior executives are now held to account.’
Today we learnt of the imminent departure of TSB CEO Paul Pester, following a catastrophic IT failure in April that left the bank’s customers without access to online banking for several weeks. This wasn’t a cyber-attack; the problems lay with the bank itself.
TSB was bought by Spanish Bank Sabadel in 2015 and got into difficulties when they attempted to migrate data from the original Lloyds Banking Group platform to the new platform provided by Sabadel. This proved a disaster with customers locked out of accounts and, in some cases, able to see confidential files belonging to others. Problems continue for TSB with online and mobile banking services disrupted just yesterday (3rd September 2018).
Customers were furious, with one saying it was ‘beyond a joke’ that after all these months problems were persisting.
It’s thought that nearly 26,000 customers have moved their accounts elsewhere, while the bank has received more than 100,000 complaints. TSB said in July that the IT failure had cost them at least £176.4m and pushed it into a half year loss of £107.4m compared with a profit of £108.3 for the same period last year.
Hackers have tried to benefit from the bank’s woes. In June Paul Pester admitted that more than 2,000 bank customers had seen fraudulent attempts to access their accounts.
Now Pester is to go, albeit with a healthy payout, and be replaced by the bank’s executive chairman Richard Meddings, while a new CEO is sought.
The bank’s initial problems started nearly five months ago and are proof, if it’s needed, that IT meltdowns are not quickly overcome and not quickly forgotten.
In the final part of our simulation exercises we encourage participants to look beyond the immediate issues and impacts present in the scenario and focus on the longer term. In the case of an IT meltdown this means looking at what measures can be put in place to regain customer trust. As TSB are finding this can be a long road.