The Financial Conduct Authority (FCA) fined Metro Bank for not having the right systems and controls to monitor over 60 million transactions, valued at more than £51bn, for money laundering risks.
This occurred between June 2016 and December 2020.
The FCA said the bank automated this process in June 2016 but the system “did not work as intended”.
There was an error found in how the data was fed into the system, meaning transactions taking place on the same day an account was opened and further transactions made until the account record was updated were not monitored.
Junior staff at Metro Bank raised concerns about some transaction data not being monitored in 2017 and 2018, but this did not result in the issue being identified and corrected.
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A fix was put in place in July 2019, but Metro Bank did not have a system to consistently check that all relevant transactions were being submitted into the monitoring system until December 2020.
The bank would have been fined £23.8m, but this was reduced by 30% after Metro Bank decided to resolve the problem.
Therese Chambers, joint executive director of enforcement and market oversight, said: “Metro’s failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.”
Since the bank was aware of these issues in April 2019, it has put processes in place to address them.
‘Draws a line under this legacy issue’
Daniel Frumkin, chief executive of Metro Bank, said: “The conclusion of these enquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid. We are continuing, at pace, our shift towards higher-yielding specialist mortgages and commercial, corporate and SME lending with a strong pipeline of business.
“In line with the upgraded guidance provided at half-year results, we have today also announced a return to underlying profitability in October, reflecting the significant progress made in delivering on the bank’s strategic priorities. Our relationship-led banking model will allow Metro Bank to go from strength to strength as we forge ahead with our growth agenda and progress towards long-term sustainable profitability.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: FCA fines Metro Bank £16.7m for financial crime failings
