Bank penalised for anti-money laundering failures
The Financial Conduct Authority (FCA) has fined another bank £4.02 million over the institution’s failure in putting up sufficient anti-money laundering (AML) controls.
The regulator said Al Rayan Bank allowed money to pass through it and be used within the UK without carrying out appropriate AML checks. It added that the firm failed to adequately check its customers’ source of wealth and source of funds when it was required to verify that the money was not connected to financial crime.
“Al Rayan failed to manage the risk that it might be used to facilitate money-laundering,” Mark Steward, executive director of enforcement and market oversight at the Financial Conduct Authority, said. “These failings create the conditions in which financial crime is facilitated and can take root within a firm. While the risk was caught in time, the failings here were egregious.”
The shortcomings, the FCA stated, were made worse by the lack of proper training provided to staff about how to handle large deposits, which further heightened the risk of money laundering and financial crime.
Despite being aware of the weaknesses in its AML controls, Al Rayan reportedly failed to implement effective changes to fix them after the FCA raised concerns about the inadequacies of their systems.
When the regulator visited Al Rayan in 2017, the bank voluntarily agreed not to take on further high-risk customers. This restriction has now been lifted, following improvements to the bank’s systems and controls, but the bank remains subject to some limited restrictions while further improvements are made.
“The FCA will continue to raise the stakes for firms that do not take their financial crime responsibilities seriously, especially in preventing money laundering risks which harms confidence and integrity in our market and in preventing financial crime, which is a key component in the FCA’s three-year strategy,” Steward said.
Al Rayan did not dispute the FCA’s findings and agreed to settle, qualifying the firm for a 30% discount. The bank would have incurred a financial penalty of £5.75 million if a settlement had not been reached.
The FCA recently fined Gatehouse Bank £1.58 million and GT Bank £7.67 million, also due to lapses in their anti-money laundering systems and controls.
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