When TSB called in IBM to help it solve the IT puzzle its core banking system switch caused I was surprised.
My initial surprise came because TSB is moving to an in-house developed core banking system from its parent company Sabadell. I thought the resources of Sabadell combined with some help from Lloyds bank, whose systems TSB’s accounts were running on, would be enough to fix it.
But no, it needs experts from IBM.
Then it hit me. Of course banks have been systematically reducing their IT workforces to cut costs for years and increasingly using fintech companies to try and fill the gap.
Banks have been slashing jobs in the thousands. For example figures from the European Banking Federation (EBF), which include the UK, revealed and more than 50,000 people working at those banks lost their jobs. Many of these work in IT.
And at the same time they have not been recruiting new IT staff and therefore missing out on a new generation of IT experts with the skills needed to support them in the digital age. According to analysis from recruitment search site Joblift the amount of jobs advertised in traditional UK banking was just over 100,000 over the last 12 months, which was 3% less than the year earlier. But more significantly is that IT jobs only made up 4.7% of these and didn’t even make it into the top five where accountants were most in demand (23%). In comparison, 25% of jobs advertised at fintechs were for software developers.
Furthermore fintech companies are becoming more attractive to work for. Joblift revealed that the average fintech employee earns £10,000 more on average than workers in the traditional banking sector. We used to say that banks get the best IT talent but that is certainly doesn’t seem to be the case these days.
Read more about the TSB IT migration disaster
TSB customers have experienced a weekend of problems with online banking services as the bank migrates from Lloyds Bank systems to its new core banking system.
The Information Commissioner’s Office and the Financial Conduct Authority are assessing the IT meltdown at TSB that led to some customer accounts being seen by other customers
TSB’s very public IT problems will send shivers down the spine of IT teams at large banks that are yet to migrate to new core banking systems
TSB chaos: When choosing a bank, people should look at core banking platform and not just funky apps.
TSB customers are still experiencing problems using online and mobile banking services after almost a week of disruption.
TSB’s IT problems have moved into a second week as the bank fights to get its services and reputation back on track.