Prolonged lapses in its anti-money laundering controls left millions of transactions unmonitored
The Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro Bank over failings in its anti-money laundering systems over a four-year period.
According to the regulator, between June 2016 and December 2020, the high street challenger bank did not have adequate controls in place to monitor over 60 million transactions, worth more than £51 billion, for potential financial crime risks.
Metro Bank introduced an automated system to monitor customer transactions in June 2016. However, the system failed to operate as intended due to a data input error. This error prevented the monitoring of transactions made on the same day an account was opened, as well as subsequent transactions until the account record was fully updated.
Concerns were raised by junior staff in 2017 and 2018 about unmonitored transaction data, but these warnings did not lead to corrective action at the time. Although a partial fix was implemented in July 2019, the regulator found the bank failed to establish a reliable process to ensure all relevant transactions were captured by the monitoring system until December 2020, more than four years after the system went live.
“Metro’s failings risked a gap being left in our defence against the criminal misuse of our financial system,” said Therese Chambers, joint executive director of enforcement and market oversight at the Financial Conduct Authority. “Those failings went on for too long.”
Since identifying the issue in April 2019, Metro Bank has introduced measures to address the flaws in its transaction monitoring system.
The FCA said it would continue to supervise firms to ensure robust controls are in place to manage financial crime risks.
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