Middleware to blame for IT platform migration meltdown, claims TSB CEO Paul Pester

Pester unable to say when all the glitches will be ironed out

TSB's migration of more than five million customer accounts to its new IT platform "went smoothly", TSB CEO Paul Pester claimed, as he gave evidence before the Treasury Select Committee yesterday.

The problems, he added, were down to middleware "causing issues with the throughput of data" - and he couldn't give MPs an estimate of when the glitches would be fully ironed out.

The House of Commons Treasury Select Committee is investigating the IT issues that have dogged the bank, the sixth biggest in the UK, following its banking platform migration from former parent Lloyds Bank to current owner's Banco Sabadell.

Pester claimed that around half of the bank's customers had encountered problems on the day the new system was switched on, with 95 per cent of customers now able to log-in to their accounts without problems.

However, two Treasury Committee staff members weren't able to access their own TSB bank accounts during the session and Treasury Committee member Simon Clarke MP accused Pester of underplaying the continuing problems, given the level of continuing complaints.

Pester suggested that the core of the continuing problems was that the bank's online banking function was struggling to deal with demand, but couldn't give a date for when all the various problems would be fixed. He also insisted that the new system had been rigorously tested beforehand.

Committee chair Nicky Morgan, though, accused Pester of being "extraordinarily complacent" for claiming that the platform migration had gone smoothly.

The banking platform shift comes after TSB was spun-out of Lloyds Bank in 2013 in response to regulator demands for more competition in the retail banking sector. Less than two years later, it was acquired by Spain's Banco Sabadell. The platform shift is intended to save TSB around £100 million in annual operating costs.

Under questioning from MPs, Pester said that he would be foregoing his £2 million bonus this year and hinted that other executives would also see their bonuses cut. Nevertheless, noted The Guardian, Pester will still be paid £1.3 million this year, with various other bonuses totalling £1.3 million in pay and various benefits on top of that.