FCA fines Starling Bank due to financial crime failings

The FCA conducted a review of Starling Bank’s financial crime controls in 2021, identifying critical concerns with the Anti-Money Laundering (AML) and sanctions framework in place. At that time, the bank agreed to a requirement constraining it from opening additional accounts for high-risk customers until this was adjusted.

However, Starling Bank did not meet these requirements and opened around 54,000 accounts for 49,000 high-risk users between September 2021 and November 2023. Following this, more specifically in January 2023, the bank became aware that its automated screening procedure was only screening customers against a part of the full list of those subject to financial sanctions since 2017. After a subsequent internal review, Starling Bank also identified system issues in its financial sanctions framework, with the financial institution reporting several potential breaches to the relevant authorities.

When commenting on the announcement, representatives from the FCA underlined that Starling Bank’s financial sanction screening controls were not acceptable, with them exposing the financial system to criminals and those subject to sanctions. Additionally, the case in which the bank was investigated took approximately 14 months from opening to reaching an outcome, compared to an average of 42 months for cases closed between 2023 and 2024. This underlines how the FCA works towards augmenting and optimising the pace of its enforcement investigations.

At the time of the news, Starling Bank developed programmes that focus on remediating these breaches and improving its wider financial crime control framework. The FCA highlighted that it plans to continue to supervise firms to ensure that they have the proper procedures and controls to manage financial crime risks.