Metro Bank has been fined £16m by the FCA due to shortcomings in its anti-money laundering systems.
- The FCA identified failures to monitor over 60 million transactions between June 2016 and December 2020.
- Errors in Metro Bank’s automated systems left gaps in monitoring same-day transactions.
- Junior staff voiced concerns, but the issues remained unresolved until a partial fix in 2019.
- Despite efforts, reliable checks on all transactions continued to elude the bank.
Metro Bank recently faced financial penalties amounting to £16 million by the Financial Conduct Authority (FCA) due to inefficiencies in its anti-money laundering systems. This significant fine highlights shortcomings in monitoring systems intended to manage criminal transaction risks. The FCA’s investigation found that Metro Bank overlooked the monitoring of more than 60 million transactions, collectively valued at over £51 billion, from June 2016 to December 2020.
The problems originated from an automated system that Metro Bank implemented in 2016. This system was designed to oversee customer transactions but failed to perform as intended. Due to data input errors, it could not monitor transactions made on the same day an account was opened, nor any subsequent payments until the account data was updated. This serious oversight resulted in potential vulnerabilities within the financial institution’s defences against money laundering.
During this period, junior staff members raised alarms over missed transactions by the monitoring system, but the bank was unable to pinpoint the root cause of these issues promptly. A fix was introduced in 2019, yet the regulatory body noted that even after these adjustments, Metro Bank still struggled to ensure all relevant transactions were effectively captured by the automated system.
Therese Chambers, joint executive director of enforcement and market oversight, remarked on the extended duration of these failings as detrimental to efforts aimed at preventing misuse of the financial system. Despite the eventual implementation of a solution, gaps persisted in Metro Bank’s transaction oversight, leaving regulatory authorities concerned about potential misuse.
In recognition of the bank’s efforts to comply with regulatory processes post-issue identification, the original fine amount was reduced from £23.8 million. The case underscores growing pressures on financial institutions from both regulators and consumers to address and mitigate risks related to fraud. Some industry voices, including those from fintech sectors, point to platforms like social media as significant enablers of fraudulent activities. In a related development, the FCA recently secured convictions against individuals involved in fraudulent crypto schemes.
The case of Metro Bank underscores the crucial need for robust and reliable anti-money laundering systems in financial institutions.
