A "For Sale" sign went up outside the troubled Co-operative Bank this morning, weeks after the cash-strapped lender said it was unable to raise required funds.
But while the bank's woeful finances dominate the headlines, its poor IT history also continues to affect customers.
Co-op Bank nearly collapsed in 2013 until a rescue plan was devised to address a capital shortfall of about £1.9bn. Part of its turnaround efforts also included throwing £500m at overhauling its creaking IT infrastructure after years of "under-investment".
Announcing the sale in a trading update, the bank said its overall IT resilience and stability has improved "substantially since 2013", with stronger end-to-end disaster recovery capability. The bank is migrating its core IT systems to an outsourced platform with IBM.
In the statement the bank said it had shifted its core mainframe system and associated mid-range servers to IBM-managed data centres over the weekend. That "planned maintenance" did not go unnoticed by customers who wrote to complain they could not access banking services.
Co-op said over the last 18 months its has progressively moved all its applications on to the IBM platform. That meant its "priority business services were unavailable for longer periods than is normally required".
It said the outage was intentionally scheduled for the time of the month when customer usage is lowest, and that the migration of its mainframe system to IBM "marks a major milestone on our journey to turn the bank around."
Separate to that, the bank also announced today that its contractual dispute with Capita over a £325m deal had been resolved, but is dropping its "IT system transformation" with the outsourcer.
Under the agreement Western Mortgage Services, part of Capita, will continue to provide mortgage administration services and mortgage application processing for the bank, retaining 740 Capita roles. The Register has asked Capita to clarify what the IT transformation contract comprised and why it has ceased under the agreement.
In 2015 the Financial Conduct Authority and Prudential Regulation Authority said they were closely supervising the firm as it worked towards restoring its technology compliance.
The FCA informed Co-op that its technology issues constitute a breach of its Threshold Conditions, which include an outline of the minimum standards for technology. That issue centred around its lack of a proven end-to-end disaster recovery capability.
The Register has asked the FCA for an update regarding the bank's IT.
In its last full-year accounts for 2015, Co-op said that until its IBM migration was complete, there was still the risk of an IT failure causing "material disruption" to the bank's products and services. "The required improvement and re-engineering of the bank's IT platform and operational process is necessary and significant in scale, complexity and cost," it said.
Any potential suitors for the bank will no doubt be as interested to hear about its IT plans, as they will be about its financial recovery ones. ®