Following this announcement, the Finance Conduct Authority mentioned that it had found shortfalls in the Metro Bank’s financial crime checks between 2016 and 2020. The problems were raised by junior staff three years before they were completely solved. The bank failed to identify and fix the problem until July 2019, and even then, the FCA said that the financial institution did not have the systems in place to consistently check that all the data was being properly entered until December 2020.
This left a loophole in which 60 million transactions, worth GBT 51 billion, were able to pass through the system without being properly reviewed by the company for potential money laundering.
The FCA said that it had fined Metro Bank GBP 16.7 million over the failings, which also risked a gap being left in the defense process against the criminal misuse of the financial system.
In addition, the FCA also mentioned that while Metro Bank started automating the monitoring of customer transactions for potential financial crime in 2016, the system did not work as needed. It also found that any transactions which took place on the day a new account was opened, or until the account record was updated, were enabled to pass through the system unchecked.
Metro Bank accepted the FCA’s findings and has since resolved the monitoring system failings, as well as focusing on optimising its processes and operations. The financial institution would have been fined GBP 23.8 million, but it was given a 30% discount under FCA rules after agreeing to resolve the problems. Moreover, the company’s shares were largely unaffected by the news of the fine.
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