Paul Pester, CEO of TSB, has resigned. Anyone who’s been following the (mis)fortunes of the bank over the last few months won’t be too surprised, perhaps, but having clung to his position for so long following the now infamous IT meltdown that left millions of customers without online banking access, what finally persuaded him to fall on his sword?
It’s impossible to say what his thinking was, but his decision to throw in the towel after seven years at the helm must have something to do with the fact that TSB customers are still facing difficulties. The failed migration of customer data to a new computer system began causing problems in April, yet TSB has still to get its house in order. On 3rd September, there were once again reports of customers being unable to log into their accounts, and with Pester in charge when this all started, it’s only right he step down.
But don’t feel too sorry for him. Despite everything that’s happened, he’ll walk away with a payout of at least £1.68 million, which could rise depending on how various investigations into the IT incident turn out.
While Pester’s resignation is in the spotlight, however, it’s something of a sideshow to the real story here. Sure, he should be held responsible as the person who led the company at the time of the IT failure, but the reality is that the migration of millions of customer data was always going to be a complex, multi-faceted project, with numerous parties involved in its implementation.
Some of those parties will likely be held to account as investigations play out, but right now we can already take valuable lessons from what has happened to TSB. For a start, it’s apparent that the bank didn’t plan sufficiently for the migration, and it didn’t do enough testing to ensure the new system was ready to roll out to customers. And, it seems, the more complex the project, the harder it is to fix it when it doesn't work as expected.
With the catastrophic result of these mistakes still causing problems, it highlights not only the importance of technology, but also the potential long-term damage that can be caused when it goes wrong. Not only has this fiasco already cost TSB more than £176 million in compensation and repair bills (with potential fines from the ICO to think about as well), the damage to the bank’s reputation could take far longer to fix than its broken IT systems.
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