That there's been a monumental Mongolian clusterhuddle at the TSB over their computer systems does not surprise us all that much. For we know - as rather too few do - that the British banking system is built upon layer after layer of ancient computer systems. Some to many of which don't speak to each other. There's a good argument for doing what the TSB has tried to do, which is move over to one single system, one possibly using modern languages, modern architecture and even modern computing boxes.
Although, obviously enough, the argument is stronger if they'd managed to get the transition seamlessly right.
There is however one part of this story that confuses us immensely. Yes, we can see the clusterhuddle. But why does the bureaucracy get a chunk of cash as a result?
Both the Financial Conduct Authority (FCA) and the ICO said they were monitoring the situation. The watchdogs have the power to investigate and potentially fine TSB for a system failure or data breach respectively.
We can see the logic about the data breach. Not wholly sure we agree with it but we can understand that logic at least. But a fine for system failure?
TSB’s botched IT “upgrade” has snowballed into a full-scale crisis, with up to 1.9 million customers locked out of their accounts for a sixth day, MPs demanding action and the bank facing a potential multimillion-pound compensation bill and regulatory fines.
Having botched it we're really rather certain that the TSB will lose a certain amount of custom. Somewhat amusing really, as once the transition is completed they'll be one of the few banks without a system held together by sealing wax and spit but there we go. Still, the punishment for a producer getting things wrong is right there in the marketplace already. So, why the fines?
Seriously, why should government - or more accurately, the regulatory bureaucracy - get cash because someone screwed up? What is the justification for fining someone for ruining their own business?
And what does this do to incentives? If the bureaucracy gets more money as people err then aren't they going to be hoping that people err? Even aiding them into error?
The TSB is now worth some sum less than it was two weeks ago. Why do they have to pay government for that achievement?