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TSB: Reputation meltdown

TSB IT systems have been in meltdown for more than a week; their reputation is now in a similar condition.

Running a crisis communication workshop in Dubai this week the inevitable question arose: What’s the worst type of crisis? To which there is one answer: A crisis that is self-inflicted. If a firm is the victim of a cyber-assault or finds itself in the midst of a terror attack it may well garner some public sympathy and will only be judged harshly if its response is slow or inept. No such luck for TSB, who brought this avalanche upon themselves. Their problems were caused when they attempted to move customer data from Lloyds Banking Group IT systems. TSB split from LBG in 2013 and was sold to Spain’s Banco Sabadell in 2015 for £1.7bn.

TSB’s woes also fit another unlovely paradigm. A crisis is often not caused by an initial event, but by the length of time a crisis continues. If TSB had managed to restore their systems quickly then the reputational damage would likely have been limited. The TSB crisis has now been on-going for seven days and at the time of writing Jaime Guardiola, CEO of Banco Sabadell, admitted customers may not have access to a full service until next week.

The bank’s British boss, Paul Pester, has done a valiant job, he has been visible, has apologised profusely and has said the firm will waive £10m in overdraft fees and no customer will lose out. All to no avail. No amount of clever PR can spin this story. Only when the problem has been fixed can TSB hope to repair its reputation.

Staff stress

Inevitably in such crises, public attention is focussed on senior executives; particularly the CEO. But how does a crisis affect staff who are dealing, day after day, with disgruntled customers? The C-suite may find it rough as they watch their reputations shredded and while some will inevitably lose their jobs, they have a fat salary and a possible pay-off to console them. No such comfort for frontline staff.

A TSB manager, speaking to the BBC, said the bank’s problems had caused serious distress to staff as well as customers.

He said: “I am desperate for chief executive Paul Pester to recognise how awful it is in the branches. I’m concerned for my staff. They were in all over the weekend and have all been expected to work from 07:00 until 20:00.

“I have spoken with many other branch managers and there have been multiple staff members breaking down, being sent home physically and emotionally exhausted.”

While angry customers may have little truck with this and might label it special pleading it is the side of a crisis that often goes unreported.

For crisis managers, looking after staff during a major incident must be a priority and it is why internal communications are so important. Customers may be at the company’s throat, but it is staff who will ultimately ride to the rescue. Everything possible must be done to support employees and keep them on-side.

In a final irony the branch manager said staff had been assured for more than a year that TSB’s new IT systems would be spectacular, but in his words: “It’s an absolute joke. Most of the (computer) error messages are in Spanish, which is great if you speak Spanish!”