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2023 04 13T095018Z 2 LYNXMPEJ3C0AF RTROPTP 4 FINTECH REVOLUT LICENSE
2023 04 13T095018Z 2 LYNXMPEJ3C0AF RTROPTP 4 FINTECH REVOLUT LICENSE

Bank of England fines former TSB executive over 2018 IT failure


Bank of England fines former TSB executive over 2018 IT failure

LONDON (Reuters) -The Bank of England said on Thursday it had fined TSB Bank’s former chief information officer Carlos Abarca 81,620 pounds ($102,115) for failing to adequately manage an IT migration in 2018 which led to disruption for millions of customers.

The sanction is a rare example of a fine for a breach of UK rules aimed at making senior managers at banks directly accountable for their actions, brought in after the global financial crisis more than a decade ago and now being reviewed.

“The PRA has fined Mr Abarca because his management of a key outsourcing relationship fell below the standard we expect,” said Sam Woods, the BoE deputy governor in charge of the central bank’s supervisory arm, the Prudential Regulation Authority.

The PRA said Abarca agreed to resolve the matter, and therefore qualified for a 30% reduction in the overall fine, which would otherwise have been 116,000 pounds.

TSB, owned by Spain’s Sabadell, was fined 48.65 million pounds in December by the PRA and Financial Conduct Authority over the botched IT platform migration that locked millions of its customers out of their accounts.

The PRA said Abarca, who had responsibility for complying with the PRA’s outsourcing rules, failed to take reasonable steps to ensure that TSB adequately managed and supervised appropriately its outsourcing arrangement in relation to its 2018 IT migration programme.

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“As part of this, he gave assurance to the TSB Board that the third party, as key supplier, was prepared for migration. However, he failed to ensure that TSB had itself obtained sufficient assurance from the third party before doing so.”

Reuters was not immediately able to contact Abarca for a response to the PRA fine.

TSB, which updated its IT systems in April 2018 but took until December of that year to return to business-as-usual, has paid 32.7 million pounds to customers hit by the migration.

($1 = 0.7993 pounds)

(Reporting by David Milliken and Huw Jones; editing by William James and Alexander Smith)

 

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