Andrew Bailey, chief executive of the FCA, has confirmed that the regulator will undertake an investigation into TSB's IT migration issues. During a planned upgrade to TSB's systems in April, there were widespread reports of internet and mobile banking being down after the scheduled downtime came to an end. There were additional reports of TSB customers being able to access the accounts of other customers and possibly having the ability to perform actions on these accounts, including transferring money.
Nicky Morgan, chair of the Treasury Committee, enquired about the extent of the failure and how TSB intends to compensate customers who have suffered a breach of potentially highly-sensitive personal data. She also wrote to Andrew Bailey who, in his response to Morgan, noted that although the FCA does not usually make information regarding investigations public, "given the level of public interest, I want to be clear that we will be conducting this work".
Bailey said that when giving evidence to the Treasury Committee in May, Paul Pester, Chief Executive of TSB, "was portraying an optimistic view of the services” and that "greater caution would have made sense". He added that the FCA is dissatisfied with TSB’s communications with its customers and has "concerns that TSB was not being open and transparent about the issues experienced". Bailey also raised concerns that the failures "could reduce trust in TSB and in the banking sector as a whole".
Additionally, he noted that TSB have not met the requirement in the Payment Services Regulations to refund all relevant customers as soon as practicable and in any event by the end of the business day after the day which it becomes aware of the fraud.
Nicky Morgan commented: "The regulator does not make such criticisms lightly. I am deeply concerned by TSB’s poor communications about the scale and nature of the problems it has faced; by its response to customer fraud; and by the quality and accuracy of the oral and written evidence provided by Dr Pester to the Committee. "The Committee will discuss Mr Bailey’s letter, and the ongoing problems faced by TSB customers, when it sees Dr Pester and other TSB Board members, as well as the FCA, on Wednesday."