Metro Bank Faces FCA Fine Over Financial Crime Prevention Failures

Metro Bank has been fined after an investigation revealed serious lapses in its financial crime prevention controls between June 2016 and December 2020. The issues, which went unaddressed for years, involved deficiencies in the bank’s automated transaction monitoring system, putting the institution at risk of facilitating criminal misuse of the financial system.

The bank introduced automated transaction monitoring in June 2016, aimed at identifying suspicious financial activity. However, due to data input errors, the system failed to flag transactions made on the same day accounts were opened, as well as subsequent transactions, until account records were fully updated. Concerns raised by junior staff members in 2017 and 2018 about the system’s effectiveness were not acted upon, resulting in a significant delay in identifying the issue.

In 2019, Metro Bank made a partial fix to the system but did not establish a reliable verification mechanism until December 2020, over four years after the system’s initial launch. Following these shortcomings, Metro Bank has since updated its processes to address and correct the flaws in its financial crime monitoring system.

Therese Chambers, joint executive director of enforcement and market oversight at the Financial Conduct Authority (FCA), stressed the severity of Metro Bank’s oversight, noting the risks posed by the prolonged failure to fix the issues. “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,” Chambers said.

The fine imposed on Metro Bank serves as a stark reminder of the importance of maintaining effective anti-money laundering (AML) controls, particularly in the face of rising concerns over financial crime. The FCA has increasingly prioritized enforcement against firms with inadequate financial crime prevention measures, underscoring the critical need for financial institutions to uphold stringent safeguards to protect the integrity of the financial system.

Metro Bank’s failure to act promptly has now led to significant regulatory consequences, with the bank having to reassess and update its procedures to ensure stronger financial crime controls in the future.