MPs slam TSB boss's complacency over IT fiasco - as it happened

Graeme Wearden

from on 2018-05-02 16:46 (#3P6M2)

TSB chief executive Paul Pester criticised by Treasury committee over the collapse of its banking services

5.32pm BST

Any ambitious junior bank executives out there should watch that hearing again closely, as an example of how not to handle a select committee.

In happier times, Paul Pester would challenge his staff to 'beat the boss' in triathlons. But today, the TSB CEO found himself on the wrong end of a beating from MPs.

What we are hearing this afternoon is the most staggering example of a chief executive who seems unwilling to realise the scale of the problem that is being faced.

If he had a time machine, it almost certainly wouldn't work

5.31pm BST

A TSB customer, Penny Simpson, isn't impressed by Pester's performance:

Pester is in another world. He is producing sheets of data that tell him 95% of his customers can log on.

WE CANNOT LOG ON and we have not been able to for 11 days. Is he in denial or just telling lies? Please media, help us. He is just telling people to contact him if they have problems. How? You cannot get through on the phone, you cannot log on.

4.41pm BST

Nicky Morgan wraps up the session by telling TSB that the committee expects customers to be properly compensated -- including finding a replacement car for Simon Clarke's constituent.

She also declares that the committee expects to see the full Slaughter and May report into what went wrong.

At the end of the day, this is a bank for whom many customers feel you are not saying "yes"...but making it as difficult as possible to get hold of the money to pay bills and putting them in an impossible financial situation.

4.31pm BST

Q: With hindsight, would you do the migration again?

CEO Paul Pester says he would not!

If I had a time machine, I would take myself back to one minute before one o'clock in the afternoon and change the decision.

If there was one decision in my life I could change, it's the decision to go ahead with the migration on 1pm on Sunday afternoon

Of course I would change it.

4.25pm BST

Paul Pester can't say how many people have left TSB since the crisis began.

TSB boss Paul Pester says he doesn't know how many customers have left the bank as a result of 10 days of online banking and app problems

Do you recognise the reputational damage that this has caused, not just to TSB but to online banking generally?

4.17pm BST

Quite.

The more this TSB hearing goes on, the more you see the disconnect between what their CEO believes (the system's now working well, people can get in touch if they have any issues) and the reality the MPs are telling them how their constituents are struggling

4.17pm BST

Pester says customers should use TSB's online complaint form to get in touch, rather than trying to phone or using social media to report problems.

Everyone enjoys tweeting, but it is 'shouting into the void', TSB's CEO adds.

What we are hearing this afternoon is the most staggering example of a chief executive who seems unwilling to realise the scale of the problem that is being faced.

4.12pm BST

Simon Clarke MP brings up the case of a third constituent, whose business is threatened because he can't access his banking services.

Pester sounds concerned, but he is also insistent that most of TSB's services are working well. Millions of customers are using their bank cards every day, he says.

4.08pm BST

Conservative Simon Clarke MP now challenges Pester, citing the case of a constituent called Kerry.

She has been stuck on telephone lines, paying 50p per minute. She relies on pensions credit, and is at her "wits end" with her gas about to be cut off.

4.03pm BST

More reaction from irate customers....

@NickyMorgan01 Please can you reiterate to Paul Pester that #TSB customers are not being replied to online, we not able to get through to someone at a call centre, many details are still missing or incorrect from my personal accounts. What can I do about it??!!

@NickyMorgan01 Mr Pester is suggesting it's the customers who are choosing to hang up if they can't get through. If he took the time to look at feedback on TSBs Facebook and Twitter, he would see that the TSB telephony system is throwing people off after a period of time.

TSB. This is a car crash. Pester now saying he's "disappointed" with the "abandon rate". ie customers hanging up when they can't get through. Wait time is 30 mins apparently

The last time I saw a major car crash of a TSC hearing and thought "He really doesn't get it" was when Bob Diamond said that "the time for apologies is over". TSB CEO Paul Pester is doing even worse in front of the TSC than Bob.

3.59pm BST

Q: Has this shambles, or meltdown, put customers at risk of fraud?

Based on experience, we know that fraudsters will be following the news, following social media and will take any opportunity to take advantage, Pester replies. That's why TSB wrote to customers this week warning them to be careful.

3.58pm BST

Q: Will there be any legal action over this mess?

Sabadell's Miquel Montes says not.

How interesting. Chairman of TSB has just failed to rule out legal action against Sabadell (Spanish parent bank). "There will be an independent review and we will act on that".

3.55pm BST

Lots of squirming from #TSB bosses when pushed on when the "shambles" will be over. "I can't give you a date" says @PaulPester "because I don't want to mislead customers"

3.54pm BST

Q: When will this shambles be over, asks John Mann

Meddings says TSB is seeing "improvement" on its online services, and across its other channels.

But it's still not good enough".

3.49pm BST

John Mann turns to the issue of compensation, and the case of a TSB customer whose wedding planning thanks to the IT chaos.

Q: How will TSB make things right?

3.45pm BST

Mann turns his guns to chairman Richard Medding about the "shambles" at TSB.

The only similar mess I can remember in my time on this committee is the Co-op Bank, says Mann. They lost their chief executive and chairman - are you going to lose yours too?

Paul Pester has offered to forfeit a 1.6m bonus linked to TSB's migration to a new IT system, the bank's chairman Richard Meddings tells the Treasury committee, after the disaster that left thousands of customers with no access to accounts.

3.40pm BST

Now it's Labour MP John Mann's turn.

Q: How many SMEs have had problems?

3.34pm BST

Pester says that IBM experts are helping to fix the IT issues....but if it was a simple problem, we would have fixed it, he adds.

3.33pm BST

Stuart Hosie now challenges Paul Pester over his claim that most of the bank is running smoothly.

One of Hosie's constituents found that his standing orders had bounced yesterday (a problem TSB claims to have fixed).

It isn't just the online, it isn't just the digital, it's the technology in the branch [too], and the complaints aren't being addressed, are they?

3.29pm BST

SNP MP Stuart Hosie asks if Pester understands the importance of digital services today, when a broken app is as bad as a closed branch.

Pester agrees. He says TSB's busiest time is typically between 7.30am and 8.30am, as customers check balances over breakfast or on the way to work.

3.23pm BST

Nicky Morgan has more inside information from TSB - a worker who says they weren't actually allowed to fail things in testing, only say they had passed or need more work.

Pester says TSB's testing operation will be examined as part of its review.

3.20pm BST

Q: Was your bonus contingent on getting this migration done now, Mr Pester?

Pester denies it. He says there was a "reward" for getting the operation done, but not at a particular time.

3.20pm BST

so far it is a fairly complacent and arrogant performance from the TSB duo; seem to think only 40,000 customer complaints in 10 days is not a major issue. Have not mentioned that punters still cannot rely on TSB faster payments to function https://t.co/B9XdWFz8qd

How anyone can think of staying with TSB after watching this grilling.https://t.co/vEwDHJa19d #tsb #rip

3.19pm BST

Rushanara Ali turns to Sabadell's COO, Miquel Montes.

Q: Would this migration have saved 100m per year? (on fees paid to Lloyds?)

3.13pm BST

Labour MP Rushanara Ali takes issue with Pester's claim that TSB customers should get in touch with problems.

She points out that customers have suffered long delays on its helplines, or lengthy journeys to their nearest bank.

3.08pm BST

Pester isn't winning his audience over, judging by these tweets from watching journalists:

If you want a masterclass in how not to handle a Parliamentary evidence session tune in now to @PaulPester speaking to the Treasury Committee https://t.co/WqMyclYnQ5

Huge groan from the team here as @PaulPester responds to the fact people in the cttee room are failing to log into online banking during the hearing by thanking so many of them for being customers! #TSB

Paul Pester says he has data showing him that almost all customers are getting online - but a cursory Twitter search shows that's simply not the case. The idea that TSB is load-limiting the amount of customers that can log on seems bizarre - they will have acres of data on usage.

Someone needs to tell TSB CEO Paul Pester to stop saying that the IT migration went smoothly. And that joking about not knowing home many customers he had in the room is ill advised. Makes him look like a smug jack***.

3.06pm BST

CEO Paul Pester is trying to persuade the Treasury committee that the situation isn't that bad really.

The engine of the bank is running smoothly, the issue is handling enough customers trying to log on simultaneously, particularly through our app and our digital channels.

"Thank you very much for using TSB"

3.03pm BST

Q: Hasn't this IT migration been a complete failure, asks Charlie Elphicke MP.

It's not been a complete failure, Paul Pester insists - sticking to his earlier argument that much of the migration went smoothly (it's just that lots of customers couldn't actually do any banking).

2.59pm BST

Charlie Elphicke MP takes up the cudgel, asking about TSB's senior management regime - and who take responsibility for this mess?

Q: Who does the buck stop with?

2.55pm BST

A TSB customer has tweeted the committee about the irony of watching Paul Pester saying there are no problems logging into TSB, while "simultaneously trying and failing to log into my account".

How can you say that this migration went smoothly? Nicky Morgan asks.

2.52pm BST

Nicky Morgan asks about another case, about a TSB customer who says they were let down by the bank, and has subsequently passed away.

In response, chairman Richard Meddings also apologises for the IT migration failures.

2.50pm BST

Watching the @TSB Chief Exec tell the Parliamentary Committee that customers can log on as normal to their accounts. Simultaneously trying and failing to log into my account pic.twitter.com/IJkgnWjYqC

2.49pm BST

The #TSB boss is advising customers to get in touch for help. That's despite customers reporting long hours hanging on helplines. Responding to emails from customers read out by the cttee @PaulPester says "I don't recognise the situation you are talking about"

2.48pm BST

Nicky Morgan says Pester is downplaying the problems at TSB.

She quotes an email from a TSB customer who has suffered disruption for the last two weeks.

Nicky Morgan says she got email this morning from TSB customer who hasnt been able to access their account or use their debit card for a fortnight - 'ask him (Paul Pester) how much cash he carries and how he'd manage' #TSB

2.44pm BST

2.43pm BST

The session is underway.

Committee chair Nicky Morgan begins by quoting TSB's ambition to become "a digital business that just happens to be a bank". Isn't the truth that it is actually a broken bank?

2.36pm BST

While we wait for the hearing to begin, here's our latest news story on TSB....

2.26pm BST

The Treasury committee hearing on TSB's IT problems is due to start in five minutes.

The witnesses are TSB chief executive Paul Pester and chairman Richard Meddings, plus Miquel Montes, chief operating officer of Sabadell Group (TSB's parent company).

You can watch this session live at 2.30pm here: https://t.co/R7YtGbRSfm https://t.co/LL7VRaisH8

1.54pm BST

Good to see @NickyMorgan01 ask the Prime Minister about TSB and the impact it could have on businesses ahead of Treasury select committee questioning this afternoon. #PMQs pic.twitter.com/2ANpWlJrFT

1.20pm BST

Back in the 1980s, TSB billed itself as "The Bank That Likes to Say Yes", in a series of jaunty adverts:

Private Eye on #TSB pic.twitter.com/25SARoqU5S

12.54pm BST

TSB's IT meltdown crisis has reared its head at Prime Minister's Questions.

12.41pm BST

Another question for MPs: why has TSB's board called in a top UK law firm, Slaughter & May?

Sky News's Mark Kleinman has more details:

Sky News has learnt that directors of the UK's sixth-biggest bank have asked Slaughter & May to conduct an independent probe of the circumstances leading to the IT upgrade which has prompted a furious backlash from thousands of customers.

The appointment of Slaughters, one of the so-called "Magic Circle" law firms, has been rubber-stamped by TSB's board and is expected to be confirmed by directors when they appear in front of MPs on the Treasury Select Committee later on Wednesday.

Exclusive: TSB board hires City law firm Slaughter & May to lead investigation into IT meltdown at Britain's sixth-biggest bank. https://t.co/gJam0n0izj

12.14pm BST

MPs on the Treasury committee could also ask TSB about the weird and less-than-wonderful state of its online banking site.

Technology expert Chris Applegate took a look under the bonnet yesterday, and recoiled after uncovering a host of errors and questionable coding work.

Ok so I just looked at the source code for the @TSB online banking login page and I am screaming. The running up and down the walls kind

First off, there's an error in the console because the domain "https://t.co/fssdJYZlDX.tsb" doesn't resolve. Which, judging from the structure, is an internal testing domain. On production! pic.twitter.com/NWxvowBjhY

Another script does load, but it has syntax errors pic.twitter.com/zxl7XNVWFa

Also there's a ton of SSL warnings, because the certificate they're using is soon going to be disregarded by Google as safe. Which is not mega-reassuring from, y'know, a bank pic.twitter.com/KoGwTxnRq6

The very first bit of JavaScript on the page, which works out the domain you are on and sets a cookie, manages to mis-spell the attribute "length". No, really pic.twitter.com/eH48KdhrGA

11.47am BST

Oof! Britain's economy is suffering its worst run against the US and the eurozone in 12 years.

So says Barret Kupelian, senior economist at PwC. He has crunched today's eurozone GDP figures (see 10.12am) and compared them to last Friday's growth data for Britain and America.

"Today's flash estimate of Eurozone GDP growth for the first quarter of 2018 shows that the bloc as a whole grew by 0.4% quarter-on-quarter. This is broadly in line with expectations but slower than the 0.7% growth rate recorded in Q4 2017. However, these preliminary Eurozone figures are likely to be revised once national authorities release their data.

"This was the fifth out of seven consecutive quarters that the Eurozone grew faster than the UK following the EU referendum. This suggests that the UK has not been able to reap the full benefits of an upturn in global economic activity unlike other large economies like the Eurozone and the US.

Latest economic growth scores on the doors (2018 Q1):

UK: 1.2%y/y (previously: 1.4%y/y)
US: 2.9%y/y (previously: 2.6%y/y)
Euro Area: 2.5%y/y (previously: 2.8%y/y) pic.twitter.com/XE6nys1ZKl

10.45am BST

Several TSB customers are tweeting their unhappiness that the bank has billed them their usual monthly charge, despite the disruption of the last 12 days.

@TSB my account has been deducted today by your monthly fee, this is outrages that after all, you still manage to deduct your monthly fee from my account. Seriously!

Well @tsb you lock me out of the system for a week so I can't access my money but can still manage to charge me the monthly fee today!!!!! What is that for? @PaulPester bonus this year? #tsb #tsbfail

@TSB "can't access account properly and services are intermittent and showing incorrect information" but TSB still want to charge a monthly fee for it? Bye bye now. Taking the piss, can't provide the service but happy to take the money for it

10.12am BST

Another newsflash: Growth across the eurozone slowed to 0.4% in the first three months of 2018.

That's down from 0.7% 0.6% in October-December 2017, and highlights how the global economy has softened in recent months.

9.59am BST

We'd like to hear from TSB customers who are still suffering from the IT problems. You can get in touch anonymously here.

9.41am BST

Back to TSB, and writer Michelle Davies is still having problems with her bank account:

@TSB When is the bank going to be up and running properly? We're missing a not insignificant sum of money that was paid to us by a third party and when I tried to call online banking to sort it out I was hung up on. How can this still be dragging on ten days later????

And they've had the audacity to take this month's 17 account fee from our account this morning. They're charging us for an account we haven't been able to access! #TSBFAIL https://t.co/EpZgQiZCL2

9.37am BST

Better news: UK construction sector returned to growth in April, as builders returned to work after the 'Beast from the East' disrupted activity in March.

UK Construction PMI bounces back to 52.5 (vs. weather-hit 20-month low of 47.0 in March). More here: https://t.co/zp2lQSK0Gl pic.twitter.com/xnXTQRnt9F

9.24am BST

A quick economic newsflash: Growth across the eurozone's factories has slowed to a 13-month low.

Data firm Markit reports that activity across Europe's manufacturers cooled in April, with growth slowing in the Netherlands, Germany, Italy, Spain and Greece.

9.05am BST

It's more than a week since TSB's chief Paul Pester tweeted that "our mobile banking app and online banking are now up and running"...and yet there are still problems.

The bank's service status page warns that customers can't see their mortgage account via internet banking and the mobile app. Some business customers are still struggling to make payments online - which could be disastrous for a firm which needs to pay suppliers or staff.

8.43am BST

Reuters has also investigated the TBS crisis -- and confirmed that rushed and inadequate testing and poor internal communication were to blame.

Reporter Lawrence White explains:

"There wasn't time to test everything, digital and mobile payment testing weren't properly scoped, so it wasn't a surprise to me when it went live last week and those parts didn't work," said one source, a project manager who oversaw people working on the upgrade, referring to the testing up to the first deadline.

A second source, a software tester, said tests were in some cases poorly designed or rushed in order to meet the initial project launch date. He also cited a lack of communication between IT and the business about who was managing the testing.

8.38am BST

Some background: TSB's IT meltdown was created because the bank moved from its old technology at Lloyds Bank (who sold it in 2013) onto a new system created by current owner Sabadell.

Insiders have told us that the team working on the migration were set unrealistically tight deadlines that didn't acknowledge the challenge of unpicking TSB out of Lloyds' sprawling network of legacy systems.

By the summer of 2016, work on developing the new system was meant to be well under way and December 2017 was set as a hard-and-fast deadline for delivery.

"The time period to develop the new system and migrate TSB over to it was just 18 months," the insider said. "I thought this was ridiculous. TSB people were saying that Sabadell had done this many times in Spain. But tiny Spanish local banks are not sprawling LBG legacy systems."

8.31am BST

Some TSB customers are fuming this morning after it emerged that the bank had failed to execute their standing orders yesterday.

The blunder affected important bills, such as monthly rent payments, set to be paid at the start of the new month.

@TSB @TSB_News please can someone answer their phone?! been on hold for over an hour, and still no answer.Then Imhung up on and https://t.co/xHU4FaG0kO have returned my standing order this morning for my rent!Can't speak to anyone about this so kinda stuck!!!

The issue affecting a number of standing orders today has now been resolved and scheduled payments have been processed.

8.09am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

We're taking evidence from Paul Pester (CEO, TSB), Richard Meddings (Chairman, TSB), and Miquel Montes (COO, Sabadell). Watch it live on Wednesday at 2.30pm here: https://t.co/R7YtGbRSfm #TSB pic.twitter.com/snWYFjCzm2

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