TSB hands over banking systems management to IBM

In search of some much-needed stability, the beleaguered bank is turning to IBM to manage its IT and is investing £120 million in technology over the next three years, including opening a new IT centre in Edinburgh

ibm mwc 2018
Peter Sayer/IDG

In the wake of its disastrous IT migration in 2018, which left millions of customers without access to banking services for days, UK bank TSB is making a raft of moves to shore up its IT capability, including an expanded partnership with the vendor IBM.

Announced yesterday, the mid-sized bank has signed a "long term deal" with IBM Services, effectively outsourcing the build and management of its private cloud environment, core banking platforms and all of the underlying infrastructure to the vendor.

The aim is to shore up the resiliency and security of its IT platforms, as well as enabling the bank to leverage cloud-enabled technology like artificial intelligence to give customers smarter banking applications and services.

[Related: Control your cloud: Data Security and Governance]

This deal follows a £120 million investment commitment over the next three years, which the bank's new CEO Debbie Crosbie made in November. This will include the creation of a dedicated technology centre in Edinburgh, housing 100 new IT roles and scheduled to open in April.

A veritable buffet of suppliers

Since being sold by Lloyds Banking Group to the Spanish group Sabadell in 2015, TSB has run its core systems across a broad set of data centres and works with various third-party providers, creating plenty of IT management headaches.

Suresh Viswanathan took over as chief operating officer at TSB in August last year, joining from rival UK bank Barclays. He has clearly been focused on regaining customer trust in the bank in the aftermath of the 2018 migration, with this deal playing a key part in the broader strategy.

"As we set out our digital strategy it is super imperative that we know what is running in each of these places and when things go pop we can zoom in and fix them, ideally before customers notice," Viswanathan told Computerworld. "Rather than a buffet of suppliers, we use IBM – who host our platform – and make them go deeper on what they manage for us and wider across other cloud infrastructure for a single management platform."

On top of that TSB hopes that IBM can bring the cognitive capabilities of services like Watson to help the bank launch smarter services for customers and "better separate noise from signal", Viswanathan added.

The deal is due to run for three to five years and includes a number of service level agreements and review periods to ensure IBM is meeting the various resiliency and security levels desired by TSB.

“As the financial services industry continues its rapid digital transformation, banks need a reliable, resilient and secure technology environment to meet the needs of customers and address complex security and regulatory requirements,” said IBM UK and Ireland, global technology services general manager, Tosca Colangeli, in a statement.

Talking its way into the job?

TSB hired IBM to investigate the IT failings which led up to the 2018 migration disaster, leading to a damning report from the vendor which was subsequently published in June 2018.

In the report, IBM identified little to no evidence of "the application of a rigorous set of go-live criteria to prove production readiness".

Read next:

Furthermore the vendor suggested how it would have gone about the project if it were in charge. “In a similar situation when IBM partnered with a financial organisation to migrate to new a core banking platform, multiple trial migrations were conducted, rolled back and then remediated prior to launch,” the report stated.

Viswanathan told Computerworld that this expanded deal was more to do with its strong strategic relationship with IBM, than specifically this engagement in 2018.

"To be honest many of us have come in much later than when these [2018] incidents happened and we have good relationships with IBM and want to engage strategically with the company," he said.

Then there was the additional unpalatable prospect of picking a new partner and having to lift and shift workloads as a result. "We didn't want to put customers through any more inconvenience and furthermore, none had the toolkit or ambitions we were looking for," he added.

Copyright © 2020 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon