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TSB CIO: “We will be a digital business that just happens to be a bank”

technology transformation process technology transformation process

Carles Abarca, CIO at TSB, sits with Hot Topics to discuss his global career in banking, digital transformation, and dealing with the impact of Brexit.

Carles Abarca’s appointment as TSB Bank CIO in September 2015 represented the latest step in a global IT leadership journey that has encompassed major organizations in a range of countries.

After studying in Spain, Abarca developed his career with large IT firms, such as Steria and Siemens. He spent additional time in education at both MIT and Stanford, and joined Banco Sabadell in January 2007, helping the organization to grow during a series of global acquisitions. In August 2015, Abarca joined TSB as CIO and Head of Migration.

TSB was formed through a divestment from Lloyds Banking Group in September 2013 and operates a nationwide network of more than 600 branches. The finance firm accepted a takeover offer from Spanish bank Sabadell in March 2015. Abarca joined after the completion of the deal to help integrate systems and build a platform for digital transformation.

“I’m very happy with my career,” he says, looking back on roles fulfilled. “I’d recommend other people who are interested in a technology career should travel around, too. It gives you an ability to understand different people and different cultures. And that’s key because technology is all about people.”

Abarca says one of the characteristics that Spanish finance firms share is the use of bespoke banking platforms. Many of the nation’s banking institutions, he says, have spent large amounts of money on IT in recent years. Abarca believes the result is more modern platforms, at least when compared to non-Spanish rivals.

“Our IT platforms tend to be heavily integrated, particularly in the case of Sabadell, so we don’t have 70 or 80 different systems to run the business,” he says. “We have a core banking system that is fully integrated and a single source of the truth, with a single customer database.”

Abarca says integration is crucial in an age of a modern digital technology transformation process, when the customer will not accept the traditional banking experience. Batch processing, which remains popular in finance, is unacceptable in the digital era. “If it takes more than five seconds for customers to open an app, it’s too long,” says Abarca.

One benefit for Spanish banks, says Abarca, is that real-time systems arrived earlier than across much of Europe. As the technology has changed, so Sabadell has grown from being a regional entity to a major European organization. As part of the technology transformation process, the firm recognized its application programming interfaces (APIs) were valuable assets.

Abarca says the approach to APIs made it easy for Sabadell to integrate data assets from the firms it acquired. “We didn’t have to develop new processes each time we bought a bank,” says Abarca, looking back on his time as CIO at Sabadell.

Since joining Sabadell, Abarca has overseen 13 integrations, from both small to large acquisitions, yet he believes the integration of TSB will provide the most complex challenge so far.

“The UK has special payment schemes which are not comparable to other countries,” says Abarca. “The schemes work well but it requires a lot of effort to flex our solution to cope with the specific issues we face.”

The scale of the transformation is huge. Abarca says his team will change every piece of enterprise technology at TSB.

He suggests the right technology transformation process must be accompanied by the right culture and mindset. It is a sentiment that backs up his earlier belief that people are key to a successful digital transformation project. The bank has already changed its organizational structure and is attracting talent from other external firms.

“Completing our migration process is just the beginning,” says Abarca. “We have the right people at TSB and we will have the right technology by the end of the year. That will unleash the power of this bank to become a real challenger. We’ll launch new, exciting products that hopefully surprise our customers.”

New concerns, of course, will continue to arise. Abarca recognizes the issues associated to the forthcoming General Data Protection Regulation (GPDR). However, he also believes the firm’s customer-centric approach to data reduces the threat.

“We know exactly where our data is and what it’s used for,” says Abarca. “I’m very supportive of GDPR. We need to give people the right to be in control of their information. That’s important everywhere, not just in banking.”

Security remains one of the most crucial elements for a modern finance firm. Abarca is keenly aware of the need to keep customer data safe, both within and beyond the confines associated to regulations like GDPR. “Being digital-friendly means you face new threats,” he says.

The firm recently launched a new mobile banking app. Other technologies are likely to enhance digital security still further, perhaps around IRIS recognition and biometric techniques. He says TSB will continue to develop strong links with London’s burgeoning FinTech community.

“It’s our obligation to protect our customers,” says Abarca. “The old way of doing banking is not what customers expect from a modern bank. We’re fully committed to delivering an outstanding digital experience to our customers. Technology will help transform this organization – we’ll be a digital business that just happens to be a bank.”