Over a week since an IT fiasco engulfed the bank TSB, half of its online banking customers are still unable to access their accounts.

The problems began last weekend (21,22 April) when weekend, TSB moved its five million customers and their 1.3 billion records from a banking platform it was renting from former owner (Lloyds Banking Group) to its new ‘state-of-the-art’ platform developed by its Spanish-owner Sabadell.

It is fair to say that the biggest transfers of banking data ever attempted in the UK has been a disaster after hundreds of thousands of customers were unable to access their own money. And the role of TSB’s Spanish owner and its chaotic data migration has been revealed.

Account chaos

TSB customers who last week did manage to get access to their online accounts, were presented with details of other people’s accounts.

Other TSB customers have been unable to log on, others have reported problems with passwords, and some have said that other people’s funds have been transferred into their own bank accounts.

The problems affected both mobile and internet banking TSB customers.

But now seven days after the problems began, over half of online customers are still unable to access their accounts.

“Internet banking is currently operating at around 50 percent of capacity,” a bank spokeswomen told the Daily Telegraph newspaper on Saturday night: “For every ten customers who try to access our internet banking, five will be able to access this service.”

“As we moved over to our new banking platform last weekend, the landing was an incredibly bumpy one for our customers, and for that I am truly sorry,” said CEO Paul Pester, who has taken personal charge of the data migration crisis.

Pester has repeatedly apologised for the crisis, and had said that TSB teams are working around the clock to fix these issues as soon as possible.

Last week Pester admitted the bank was “on its knees” and that he called in experts from IBM to help with the issue.

TSB said that IBM has been “appointed in a Systems Integration role, to help identify and resolve performance issues in the platform. In this role IBM will report to the TSB CEO.”

Warning signs

Meanwhile an insider with extensive knowledge of the systems involved has told the Guardian newspaper that there were warning signs that a catastrophe of this magnitude might happen a full year earlier.

He detailed a disturbing lack of appreciation of the complexity of the migration by TSB’s Spanish owners Sabadell.

It all began when TSB was forced to split from Lloyds Banking Group (LBG) in 2013 by the EU as a condition of its taxpayer bailout in 2008.

LBG apparently rented TSB a clone of the original group’s computer system for £100m a year.

Unfortunately it seems that original banking system was a “bodge of many old systems for TSB, BOS, Halifax, Cheltenham and Gloucester and others” that had resulted from the “nightmare” integration of HBOS with Lloyds as a result of the banking crisis, the insider told the Guardian.

“The idea with the IT was to create a mirror copy of the sprawling LBG merged systems and use this to service the much smaller TSB bank. It seemed a bad fit for a smaller bank to inherit all the problems of a bloated mess to service far fewer customers,” the insider said.

When Sabadell bought TSB for £1.7bn in March 2015, it formulated a plan (which it has done successfully before) to merge the bank’s IT systems with its own Proteo banking software – a process that would save it millions.

But it seems that TSB owner Sabadell was warned in 2015 that its ambitious plan was high risk and that it was likely to cost far more than the £450m Lloyds was contributing to the effort.

“It is not overly generous as a budget for that scale of migration,” John Harvie, a director of the global consultancy firm Protiviti, told the Financial Times in July 2015.

Clusterf**k in the making

But the Proteo system was designed in 2000 specifically to handle mergers such as that of TSB into the Spanish group, and Sabadell pressed ahead.

By the summer of 2016, work on developing the new system was under way and December 2017 was set as the deadline.

“The time period to develop the new system and migrate TSB over to it was just 18 months,” the insider is quoted as saying. “I thought this was ridiculous. TSB people were saying that Sabadell had done this many times in Spain. But tiny Spanish local banks are not sprawling LBG legacy systems.”

To make matters worse, the Sabadell development team did not have full control – and therefore a full understanding – of the system they were trying to migrate customer data and systems from because Lloyds Banking Group was still the supplier.

“This turned what was a super-hard systems job [into] a clusterf**k in the making,” the insider said.

By March 2017, it became obvious the migration was going to be messy.

“It was unbelievable – hardly even a prototype or proof of concept, yet it was supposed to be fully tested and working by May before the integration work started,” the insider told the Guardian. “Senior staff were furious about the state it was in. Even logging in was problematic.”

By the autumn it still was not ready, and eventually Sabadell pushed back the switchover to April to try to get the system working.

Successful migration?

On 23 April, Sabadell announced that Proteo4UK – the name given to the TSB version of the Spanish bank’s IT system – was complete, and that 5.4m customers had been “successfully” migrated over to the new system.

Software engineers were pictured in a LinkedIn post (since removed) toasting the migration of customer records with glasses of champagne. They described themselves as “champions” and a “hell of a team”.

“With this migration, Sabadell has proven its technological management capacity, not only in national migrations but also on an international scale” Josep Oliu, the chairman of Sabadell is quoted as saying.

But when the new Proteo4UK system was switched on, systems crumpled and up to 1.9m TSB customers who use internet and mobile banking were locked out.

“I could have put money on the rollout being the disaster it has been, with evidence of major code changes on the hoof over last weekend and into this week,” the insider said.

There has been little public comment from Sabadell itself since the disaster, with the Spanish owner preferring to leave it to TSB’s CEO to manage the fallout.

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