TSB’s failed attempt to migrate its core banking platform should be received as a lesson and not as a warning sign

TSB’s IT migration was expected to save up to £160 million a year by moving the bank away from its highly reliable but outdated core banking system to create significant operational efficiencies for the IT department. At the same time, the project sought to provide the bank’s customers with seamless and convenient mobile and web banking services that are on par with challenger banks offerings. However, with some customers still unable to access key accounts or make payments more than a month later, experts predict that the failure could end up costing the bank as much as £56 million this year with an increasing number of customers trying to sever their ties with the organisation.

Discussing the TSB incident, Carl Davies, CEO of TmaxSoft UK says: “Even before the TSB crisis, due to the level of risk involved in largescale migrations, many IT leaders and CIOs have been delaying implementing their digital transformation projects.

And now, with the TSB fiasco playing out in the public eye, these anxieties are expected to be more heightened and discourage other organisations from taking on these monumental initiatives. But it’s important this case doesn’t deter financial institutions from embarking on transformation initiatives as the imperatives for change, and moving away from legacy technology remain the same.

“Many large financial institutions are finding the transition to the digital economy challenging, and we believe that the mainframe sits at the heart of this. Those that continue to operate on mainframes will find that they do not have the flexibility or agility to develop new applications and offer the innovative and user-friendly services that customers are increasingly accustomed to. In order to thrive in the era of digital transformation, enterprises must take the initiative and move to more advanced IT environments that are compatible with the new breed of digital services.”

Davies continues: “Even with the advantages, it’s important to recognise risks come with any transformation project, and companies can minimise the chances of a TSB-type scenario from happening. When it comes to moving away from a mainframe system, one of the riskiest tasks is altering programmes and applications, or re-writing code. Re-engineering systems can take years, which means that the scope for error is far-reaching.  As a result, businesses can choose to re-host as it enables them to simply lift existing mainframe assets and shift them to new open platforms. Re-hosting is faster, less risky, and helps systems to operate in the exact same way, but many organisations still choose outdated strategies that put them at harm.”

“Although TSB will be in a much stronger position once it has migrated to its new system, achieving the desired outcome and becoming a modern bank that provides its customers with personalised, seamless and uninterrupted service does not have to be a dangerous journey. It is therefore imperative that any organisation that is considering a transformation project first identifies any gaps in their knowledge and works with the right partner to secure the smoothest transition possible,” Davies concludes.