Wednesday 15 January 2020 2:58 pm

IBM takes control of TSB's IT after digital meltdown

TSB today handed control of its IT systems to tech giant IBM in a deal to overhaul its banking platforms as the bank attempts to escape the shadow of a disastrous digital meltdown.

Spanish bank Banco Sabadell, which has owned TSB since 2015, hired IBM for €1bn (£856m), according to Reuters.

Read more: TSB Bank faces heavy criticism after investigation into IT meltdown

The deal, which was signed in December 2019 and announced today, gives IBM control over the running of TSB’s ATMs, digital banking and high street branches.

Tosca Colangeli, IBM’s global technology services general manager, said: “Banks need a reliable, resilient and secure technology environment to meet the needs of customers and address complex security and regulatory requirements.”

In April 2018 an IT failure left millions of TSB customers without access to online banking.

Read more: Where all 82 TSB branch closures are taking place

The bank was investigated by the Financial Conduct Authority and former chief executive Paul Pester was sacked a few months after the incident.

Shortly after, IBM released a report concluding that TSB had not carried out sufficient tests before transferring customers to a new system.

Today’s announcement will build on TSB’s commitment to consolidate its operations after the meltdown cost the company £330m.

TSB also announced the creation of a new technology centre in Edinburgh, which will create 100 new jobs.

Read more: After TSB’s outage, let’s force banks to ring fence an IT budget

The centre, which is set to open in April this year, will include technical specialists, data engineers and analysts.

Suresh Viswanathan, TSB’s chief operating officer, said “Our partnership with IBM marks the next exciting phase in our tech transformation.”

The bank said that following on from its partnership with payments provider Square, it was keen to explore further opportunities in fintech.