Metro Bank has been fined by the FCA for inadequate monitoring of financial transactions.
- The bank failed to properly monitor transactions worth over £51bn for money laundering risks.
- Issues with the bank’s monitoring system went undetected from June 2016 to December 2020.
- Concerns raised by staff in 2017 and 2018 did not lead to a timely fix.
- Metro Bank has now implemented measures to correct these past failings.
Metro Bank has been fined £16,675,200 by the Financial Conduct Authority (FCA) due to significant weaknesses in its systems for monitoring financial transactions. This inadequate oversight posed a risk to the prevention of money laundering and other financial crimes.
The failings occurred over a period beginning in June 2016 and extending until December 2020. During this time, Metro Bank did not have the necessary systems in place to scrutinise over 60 million transactions, collectively valued at more than £51 billion. The bank’s automated transaction monitoring, intended to identify potential financial crimes, unfortunately did not perform as intended due to an error in data processing.
This error allowed transactions conducted on the same day that accounts were opened, and subsequent transactions until account details were updated, to escape monitoring. Although junior staff highlighted these issues in 2017 and 2018, the problem was neither identified nor corrected promptly.
A solution was eventually introduced in July 2019, but it took until December 2020 to ensure that all relevant transactions were consistently monitored. This delay left a protracted period during which the bank’s transactions were not subjected to adequate oversight.
In reaction to these findings, Metro Bank has put in place remediation processes to address the shortcomings identified in their transaction monitoring mechanism. The bank’s CEO, Daniel Frumkin, indicated that the issue is now resolved, allowing them to concentrate on future goals, including strengthening their focus on specialist mortgages and business lending.
The FCA’s actions underscore the importance of robust financial crime prevention systems within banks.
