TSB calls in Slaughter and May for investigation into online banking shutdown

TSB has instructed Slaughter and May to investigate the IT crisis that has crippled the bank’s operations for more than a week.

The bank has brought in the magic circle firm to carry out an independent probe of the circumstances surrounding the tech problems, which have left many customers without access to their bank accounts since Monday last week (23 April).

Slaughters’ appointment is expected to be confirmed by TSB directors when they face the Treasury Select Committee later today (2 May).

After writing to TSB last week, Nicky Morgan, chair of the Treasury Select Committee, said: “The Treasury Committee is extremely concerned by the problems at TSB, and by the apparent miscommunication to customers about the extent and nature of these problems. It has been reported that services such as online banking have been down for some TSB customers for over a week.”

In a letter to Morgan released ahead of the hearing, Pester admitted that on the first day of the IT chaos last week, as customers attempted to ring the bank, “average wait times were close to one hour; by Thursday 26 April this had remained high at approximately 30 minutes”.

Pester’s letter also said the “issues started to occur after TSB’s migration onto a new platform built for TSB by our parent company, Sabadell, and operated by Sabadell’s technology subsidiary, Sabis”.

The Treasury Select Committee and Slaughters both declined to comment.

Late last year, TSB appointed a new general counsel with the hire of Lorna Curry from GE Renewable Energy in Paris, where she was GC for its hydroelectric business. She manages a legal function comprising four teams – commercial, corporate, products and company secretariat – and reports to chief financial officer Ralph Coates.

She took over from former GC Susan Crichton, who retired at the end of January this year.

TSB split from Lloyds Bank in 2013. At the height of the financial crisis in 2008, Slaughters took a lead role for the Treasury on the UK Government’s acquisition of a stake of about 40% in the merged HBOS and Lloyds TSB.

Picture credit: Nikk