The Prudential Regulation Authority (PRA) has fined the fomer Chief Information Officer (CIO) of TSB Bank, Carlos Abarca, over £80,000 for issues related to the 2018 IT migration programme.

According to the PRA, Abarca did not take the ‘reasonable steps’ in ensuring TSB adequately and appropriately managed and supervised its outsourcing arrangement for the IT move.

The new £81,620 fine follows on closely from the enforcement action taken in December 2022 against TSB for operational resilience failings, which resulted in a joint financial penalty of £48,650,000 imposed by the PRA and Financial Conduct Authority (FCA).

In 2018, the migration left ‘a significant proportion’ of TSB customers unable to access their banking services, with disruptions across TSB’s branch, telephone, online, and mobile banking.

The interruption occurred during the migration of customer data from Lloyd’s IT system, now operated by Sabadell, the banks’ newer owner.

While initially the data migration was successful, technical difficulties affecting services soon arose.

As CIO of TSB, Abarca had responsibility for TSB complying with the PRA’s outsourcing rules, and was responsible for TSB’s outsourcing relationship with its main third-party supplier for the IT migration.

The PRA said that Abarca has assured the TSB Board that the third party was prepared for the migration, but had failed to ensure that TSB itself had obtained sufficient assurance from the third party prior to this.

In the investigation, Abarca was found in breach of PRA’s Senior Manager Conduct Rule 2 since he failed to ‘take reasonable steps’ to ensure that TSB complied with PRA Outsourcing Rules

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Particularly, Abarca did not: ensure the third party’s ability and capacity were adequately reassessed on an ongoing basis, ensure that TSB obtained sufficient assurance of the third party’s readiness, and give sufficient consideration as to whether further investigation was required before assuring the TSB Board.

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said: “Senior managers have an essential role to play in ensuring that firms manage and supervise outsourcing effectively. In this case, the PRA has fined Mr Abarca because his management of a key outsourcing relationship fell below the standard we expect.’