In the midst of its six-day online banking meltdown, which is showing no sign of letting up, TSB has hauled in the systems integration big gun or as it is otherwise known, IBM.
The bank confirmed the signing of Big Blue this morning as part of its rather uncomfortably timed first quarter financial results for 2018, in a statement titled “We’re putting things right”.
The results show that operating costs increased 2.3 per cent year-on-year to £207.5m, which TSB said was “primarily due to increased outsourcing fees paid to Lloyds Banking Group”.
TSB split from Lloyds in 2013 as a result of the state aid Lloyds Banking Group bagged in the financial crisis in a bid to increase competition in UK banking. (Incidentally, Lloyds outsourced data centre management to IBM last year).
It was then bought out by Spanish bank Sabadell in 2015, which announced plans to transition the bank off Lloyds’ IT systems.
Until that point, as TSB put it, the bank “had to settle with renting a competitor’s” tech infrastructure, which “limited TSB’s competitive position”. It also cost about £200m for hosting each year, and the bank claimed the move to its own systems would shave off £160m annually.
In 2015, Sabadell said the £450m provided from Lloyds Banking Group under state rules would be “more than sufficient” for the switch of its core banking systems from Lloyds’ to a newly developed version of its Proteo system. That was designed in 2000 specifically for mergers, and is based on Accenture’s Alnova system.
But the transition of the 5 million-plus customers and 1.3 billion records to the new platform created by the banks, Proteo4UK – described as the biggest undertaken in Europe – has, as CEO Paul Pester admitted today, been an “incredibly bumpy” move.
Proteo4UK is a new core banking system with TSB-specific customer-facing components, and TSB CIO Carlos Abarca told a financial tech news site at the end of last year that it was running “in a very active mode” out of two data centres in the UK.
TSB added that Teradata would support data acquisition, IBM Infosphere would provide data integration, and MicroStrategy data exploitation, while the LinkedIn profile of someone working on the integration for TIBCO gives further hints of the technologies the platform is based on.
Now, however – possibly to appear to be taking fresh action to gain control of the situation – TSB has said it has appointed IBM in a systems integration role.
This is “to help identify and resolve performance issues in the platform”, the bank said, and Big Blue will report direct to TSB’s boss. (Presumably customers will be hoping IBM does a better job for the bank than they did for ad giant WPP last year.)
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