The Prudential Regulation Authority (PRA) has fined the former chief information officer (CIO) of TSB Bank for breaching a senior manager conduct rule.

Carlos Abarca has been fined £81,620 after the PRA found he had failed to take reasonable steps to ensure that TSB adequately managed its outsourcing arrangement in relation to a 2018 IT migration programme.

This follows on closely from enforcement action taken in December 2022 against TSB for operational resilience failings, which resulted in a joint financial penalty of £48.7m imposed by the PRA and Financial Conduct Authority (FCA).

In his role as TSB CIO, Abarca had responsibility for TSB complying with the PRA’s outsourcing rules, and in particular for TSB’s key outsourcing relationship with its main third-party supplier for the IT migration programme.

As part of this, he gave assurance to the TSB board that the third party, as the key supplier, was prepared for migration. However, the PRA stated that he failed to ensure TSB had itself obtained sufficient assurance from the third party before doing so.

“Senior managers have an essential role to play in ensuring that firms manage and supervise outsourcing effectively, commented deputy governor for prudential regulation and chief executive officer of the PRA, Sam Woods.

“In this case, the PRA has fined Abarca because his management of a key outsourcing relationship fell below the standard we expect.”

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