B2B Payments

TSB IT Disaster Locks Entrepreneurs Out Of Accounts

The ongoing outage of TSB (Trustee Savings Bank) services in the U.K. isn’t just impacting consumers: The technical glitches that occurred as a result of the challenger bank migrating customer data to a new IT system is causing disruption among entrepreneurs and small businesses too.

TSB vowed an IT system “upgrade” as it planned to migrate data once stored on Lloyds Banking Group IT systems. Following the sale of TSB by Lloyds to Spain’s Sabadell in 2015, TSB has been gradually detaching itself from its former parent company.

The bank’s IT “upgrade” has resulted in service outages for as many as 1.9 million customers, including entrepreneurs and SMBs, as a process scheduled for over the weekend was hit with glitches, forcing TSB to take its internet and mobile banking services offline as it tried to restore its platform. The bank began moving 1.3 billion customer records from Lloyds Banking Group IT systems onto a new platform on Friday (April 20), with plans to complete the migration Sunday evening.

TSB Chief Executive Paul Pester has apologized for the issue, which reports in The Guardian on Tuesday (April 24) said was one of the U.K.’s worst IT problems to hit the banking sector, and which could result in regulatory fines as MPs begin to probe the matter.

Customers are in day five of service outages, with small business customers unable to pay bills or make payroll. According to reports, some account holders said all of their direct debits are now gone.

One small business owner, Lee MacDonald, told The Guardian that his company has “literally stopped” because of the outages. Some customers were told by TSB branches that it would take another two days for services to be restored and to regain access to their accounts, while additional issues may take longer to be resolved.

Among the problems resulting from the IT glitch was the exposure of some customers’ account data to other customers.

Pester admitted that “402 customers could see some data that we would not normally show them online.”

Another entrepreneur, Alex, told The Guardian that he has been unable to pay salaries for employees of his consultancy firm.

“I’ve had to come down here to arrange for a bulk transfer over the HSBC, and we’ll have to pay the salaries from there,” he said.

Nicky Morgan, Conservative MP and chair of the Treasury Committee, is calling for the bank and Pester himself to address the issue. Morgan is also planning to speak with the Financial Conduct Authority about the matter.

“This is yet another addition to the litany of failures of banking IT systems,” he said. “It simply isn’t good enough to expose customers to IT failures, including delays in paying bills and an inability to access their own money. Warm words and platitudes will not suffice. TSB customers deserve to know what has happened, when normal services will resume and how they can expect to be compensated.”



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.