An ex-TSB information officer was fined £81,000 by UK regulators for the bank’s IT failure in 2018 that prevented millions of customers from accessing their accounts, Entrepreneurng report.
Carlos Abarca, who was TSB’s chief information officer at the time of the collapse, was accused by the Prudential Regulation Authority (PRA) of having “failed to take reasonable steps” to make sure that an outsourcing company controlled by TSB’s parent company was prepared to handle the major IT migration of clients.
The penalty against Abarca comes months after the bank was hit with a £48 million fine for “widespread and serious” mistakes connected to the scandal that surfaced following its separation from Lloyds Banking Group, its former parent firm.
The penalty against Abarca comes months after the bank was hit with a £48 million fine for “widespread and serious” mistakes connected to the scandal that surfaced following its separation from Lloyds Banking Group, its former parent firm.
Regulators have only so far held Abarca personally responsible for the IT migration failure as a TSB executive. When asked if there were any investigations underway into other leaders, the Bank of England declined to comment. Further penalties against directors and executives who were employed by TSB at the time of the collapse would be possible as a result.
Within months of the occurrence, Paul Pester was compelled to quit as the chief executive of TSB as a result of harsh criticism from lawmakers and authorities. One of the few penalties handed out under the UK regulatory senior managers’ regime, which attempts to make leaders personally accountable when things go wrong, is fine for Abarca.
Abarca was in charge of overseeing TSB’s compliance with the PRA’s outsourcing regulations and managing the bank’s engagement with its primary outside vendor for its IT migration program.
According to the regulator, Abarca assured the board that the provider would be prepared for the relocation in early 2018 but did so before he had gotten sufficient assurances from the source.
Millions of consumers experienced chaos as they were locked out of their accounts for weeks after the event started in April 2018, and some were still having problems in December of the same year.
A year later, in December 2019, Abarca departed TSB before joining Sabadell, the Spanish parent company of TSB, as its chief technology officer. He left Sabadell at the beginning of the year.
Sam Woods, CEO of the PRA, stated that senior managers must play a crucial role in ensuring that businesses effectively manage and oversee outsourcing. The PRA punished Abarca in this instance because his management of a crucial outsourcing arrangement wasn’t up to par.
In conclusion, following his acceptance of a settlement, the PRA decreased Abarca’s fine by 30%. If not, the fine would have been £116,600.
Source: The Guardian
