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The Technology Journey to Disaster

By Phil Factor,

Those of us who have worked in IT for retail banking will be looking on in horror at the catastrophic attempt by the Spanish-owned TSB to introduce a new IT platform for their UK customers. TSB, formerly the Trustee Savings Bank, was spun out of Lloyds Bank after the EU ruled that it was a monopoly, because of the state aid it had received at the time of the banking crisis. For a while, the TSB used its existing Lloyds IT at a cost of £220 million a year, but decided to transfer to the Proteo platform, which is used by its new owners, Sabadell.

The Proteo system was designed in 2000 specifically for mergers, and was the key to the successful integration of the four Spanish banks it acquired between 2003 and 2007. It is based on Accenture's Cobol-based Alnova system, but customized, installed and managed by TSBs staff. It runs on Amazon Cloud. At the launch of Proteo4UK, Paul Pester, CEO of TSB, boasted that they had "created a more digital, agile and flexible TSB". Carlos Abarca, the CIO, agreed, "It's the technology journey that we are on together with our customers!"

This "customer-centric by design" platform was supposed to "enable the open banking revolution". Instead, on 21st April, it caused an unprecedented banking disaster, locking nearly two million banking customers out of their accounts for up to ten days, and over a month-end, when businesses particularly rely on access to their accounts. As problems continued, TSB appointed IBM, in a systems integration role, to get the system under control and "to help identify and resolve performance issues in the platform".

Customers were experiencing zero balances, incorrect currencies, massively inflated mortgage amounts, and e-mails saying that there are no records of recent direct debits. There were many initial reports of users seeing information on-screen that looked like other people's bank accounts, but these reports ceased after a few hours.

Bank customers puzzled over on-screen messages, such as:

'BeanCreationNotAllowedException exception: Error creating bean with name 'contextManagerPostController': Singleton bean creation not allowed while the singletons of this factory are in destruction (Do not request a bean from a BeanFactory in a destroy method implementation!)'

Other customers tried to make transfers while getting 'ArrayIndexOutofBounds' and java.lang.NullPointerException errors. Branches report the systems spewing out error messages in Spanish. As I write this, on 4th May, problems with internet banking are still being reported by customers.

Instead of saving TSB over £100 million a year, it has greatly reduced public confidence in the bank. TSB are likely to be fined more than the predicted saving by the Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO), but the loss in reputation is incalculable, and the law firms representing customers are busy sharpening their pens for the fray.

It is far too soon to work out what went wrong. However, the whole industry will be keen to find out, as soon as possible. The worst thing that can happen is for a delay in the forensic examination of the disaster. We need to learn the lessons as soon as possible, not from schadenfreude, but because there is no better spur to improving the quality of software than learning from failure.

Phil Factor.

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