Lloyds has now confirmed what we recently reported in a Newsletter regarding the roll out of Thought Machine’s Vault technology across the Group. At a recent meeting William Chalmers, Chief Financial Officer, said that:

“In the first half of the year, we safely migrated around 120,000 customer accounts to our pilot new bank architecture. [Vault: BTU bold] This is less than the 400,000 originally planned, but sufficient to provide the necessary proof-point for our investments, build confidence for our cloud plans and allow work to progress”.

Vault will be tested over and over again to make sure that it works in the real world, can interact with the bank’s other applications and systems and, most importantly, can work at scale.

Andy Maguire, the new Chairman of Thought Machine and former HSBC Group Chief Operating Officer [Charlie Nunn will know him very well] said recently: “At HSBC we ran approximately 50 core banking systems to serve 38 million customers in 68 actual countries. We ran more than 7,000 applications. In my old job as COO of HSBC the reason I’d want Vault is to make everything a bank does simpler, better and faster. It unlocks a world of possibilities”.

Lloyds is not as complex as HSBC, but it doesn’t want to do a TSB. Members will recall that TSB moved customers from the Lloyds core banking platform to a new one developed by Sabadell, its Spanish owner, but customers began experiencing major problems with their accounts within a few hours of the new system going live. The independent report into what went wrong, which was carried out by the law firm Slaughter and May, concluded that TSB ran tests on only one of its two new data centres. The report concluded:

“While the TSB board asked a number of pertinent questions regarding the defender plan, there were certain additional, common sense challenges that the TSB board did not put to the executive (including why it was reasonable to expect that TSB would be ‘migration ready’ only four months later than originally planned, when certain work streams were as much as seven months behind schedule)”. The true cost of TSB’s botched IT migration may never be fully known but when you add up all the fines, extra staff costs, IT consultancy fees, legal fees and lost business, you’re not going to have much change out of £500 million.

This union was the only organisation sounding the alarms bells based on reports we were receiving from members working on the migration project. The Treasury Select Committee investigating the TSB disaster took the unusual step of publishing all our Newsletters on its website. Not surprisingly, our warnings were ignored by TSB’s senior management team, most of whom left under a cloud, pardon the pun, when the independent legal report was published.

In respect of the Lloyds core banking transformation, the FCA is being kept informed at all stages of the project. BTU is collating information from members working on the various projects associated with Thought Machine’s Vault in order to get a clearer picture of what’s going on. If we see any repetition of the TSB disaster, with Lloyds ignoring warnings from staff working on the project then we won’t hesitate to blow the whistle and write to the FCA directly. When big projects like Vault go wrong, it is always the staff who suffer, regardless of whether they were involved in the project or not. Just ask the 900 TSB staff who have lost their jobs over the last 18 months as the bank scrambles to save costs.

Members with any issues they would like us to deal with on this should contact the Union’s Advice Team on 01234 262868 (choose Option 1).

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