TSB and its IT provider Sabis only tested its new IT system offline and not in a live environment before attempting a full-scale migration in April 2018, a report from law firm Slaughter and May has found.
Around two million customers lost access to their online banking services after the botched introduction of the system.
The problems left customers unable to access their accounts or make payments, while others were shown incorrect information, and in some cases the details of other people’s accounts.
The issues stemmed from when TSB split from Lloyds Banking Group. It continued to rent a banking platform from Lloyds while it constructed its own, Proteo4UK.
That system was intended to go live over the weekend of April 21 and 22, 2018, as it moved its customers’ data from the old platform to its new one.
The problems persisted for months, and in September 2018, chief executive Paul Pester stepped down over the issues. He has since been replaced by Debbie Crosbie.
In July last year, the bank revealed the IT issues had cost it £176.4m, pushing it into a loss of £107.4m in the six months to June 30, 2018.
“TSB went live with a system that was neither stable nor complete,” Slaughter and May’s report found. "We have concluded that the new platform was not ready to support TSB’s full customer base and Sabis was not ready to operate the new platform. While the TSB board asked a number of pertinent questions... there were certain additional common sense challenges that the TSB board did not put to the executive.”
Responding to the findings, TSB said the most recent data from the Financial Conduct Authority (FCA) shows IT incidents at the bank are now in line with, or below, the levels of others in the industry.
Richard Meddings, chairman of TSB, said: "When we commissioned Slaughter and May to carry out this review, we specifically asked for a fully independent and thorough inquiry.
"Although the report doesn’t paint the full picture of migration, the board were absolutely clear that we wanted to be transparent and learn fully from those aspects which went wrong. That is why we have taken the decision to publish this report in full.
"Importantly, TSB has evolved to be a better business than the newly created bank which began the migration project. We have already made major changes as a result of what we have learned, including moving to take direct control of our IT operations.”