Preventing Financial Crime a Top FCA Priority

In 2017 and 2018, junior staff highlighted issues after the 2016 implementation of an automated system for monitoring customer transactions. Although the system was designed to identify questionable transactions, it faced operational difficulties.

Staff recognised that transactions that occurred the day the account was opened were not actually being checked and the delay in Metro Bank rectifying the loophole led to 60 million transactions, involving sums totalling £51billion, not undergoing adequate money laundering checks.

Metro Bank did not resolve the issues around the automated system until July 2019, however they were criticised by the FCA for not consistently checking data until December 2020.

In delivering the fine of £16.7million the FCA said the failings “risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long”.

Because Metro Bank agreed to resolve the issues, their fine was reduced by 30%, in accordance with FCA rules, from an initial fine of £23.8million.

Garon Anthony, Financial Disputes Partner, comments:

“Preventing financial crime continues to be a top regulatory priority for the FCA. The outcome of this investigation is another clear indicator, following hot on the heels of the FCA’s fine of Starling Bank for failings in their financial crime systems and controls, of the importance for financial institutions of ensuring that their AML processes are robust and effective as the regulatory sanctions for failures to meet these requirements are severe.

“Banks should ensure that whilst seeking to create efficiencies in their systems, they continue to comply with their regulatory obligations, particularly those which are there to prevent financial crime.”