Santander UK has been hit with a £107M fine from the Financial Conduct Authority (FCA) after the bank was found to have “serious and persistent” gaps in its anti-money laundering controls.
The UK regulator handed out the £107,793,300 fine to the bank after ruling that its AML failings had affected its business banking customers between 31 December, 2012 to 18 October, 2017, “significantly” impacting more than 560,000 business customers.
Santander was found to have had ineffective systems to adequately verify information provided by customers about the business they would be doing. The bank also failed to properly monitor the money customers had told them would be going through their accounts compared with what actually was being deposited.
One case was outlined by the FCA , in whicha new customer opened an account as a small translation business with expected monthly deposits of £5,000. Within six months, it was receiving millions in deposits and transferred money to separate accounts.
The account was recommended for closure by the bank’s AML team in March 2014. However, the FCA detailed that poor processes meant that this was not acted upon until September 2015 and, as a result, the customer continued to receive and transfer millions through its account.
“Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA.
“As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls.”
The FCA identified several other business banking accounts which Santander failed to manage correctly, leaving the bank open to “serious” money laundering risk. These failures led to more than £298m passing through the bank before it closed the accounts.
Santander acknowledged there were weaknesses within its AML systems and controls and began improvement works to the department in 2013. The FCA noted that, whilst the changes resulted in some improvements, Santander’s changes did not adequately address the underlying weaknesses.
In 2017, the bank implemented a comprehensive restructuring of its processes and systems and continues to invest in its ongoing transformation and remediation programme.
Santander did not dispute the FCA’s findings and agreed to settle, qualifying them for a 30% discount.