Edinburgh-headquartered TSB Bank will sack up to 400 people and close 86 branches across the UK as the lender also announced new tech investments.
By reducing its number of branches to 454, the bank aims to save £100m by 2022, according to The Guardian. CEO Debbie Crosbie did not rule out closing more branches in the future.
She made the announcement on Monday November 25 as she said her vision for the bank in 2022 included investing £120m in its digital channels over the next three years.
The redundancies and other restructuring expanses are expected to amount to £180m by 2022.
The news comes as TSB Bank is still recovering from having accidentally locked out thousands of customers from their accounts in April 2018 when the bank switched to a new core computer platform.
The IT failure cost TSB Bank £366m in compensation and other costs. A report later stated that leading executives had lacked common sense when they decided to swap the system to a new system that was not fully tested.
TSB Bank’s IT problems are seemingly not over. RegTech Analyst has reported that the bank suffered a service outage last week that, again, rendered customers unable to make payments.
The news comes as UK regulators are reportedly gearing up to strengthen the laws around banks suffering preventable IT service outages. The Treasury Committee announced in October that they are considering strengthening the Senior Managers and Certification Regime (SM&CR).
Expanding the scope of SM&CR would mean it would shift the responsibility of digital outages at financial service firms from the businesses as a whole to individual senior managers and, arguably, boosting accountability in the sector.
TSB Bank is by no means the only financial service provider to suffer service outages: challenger bank Monzo suffered a similar service outage in July and its rival Revolut’s systems locked customers out from their accounts in October.
Moreover, TSB is not the only bank to have made redundancies as it is investing in its IT infrastructure.
Last week it was revealed Deutsche Bank had replaced 680,000 hours of manual work through automation after announcing it would make 18,000 employees redundant earlier in 2019.
In October, HSBC was reportedly considering to cut 10,000 employees and Commerzbank revealed it would let 4,300 people go in September.
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