The UK’s Financial Conduct Authority (FCA) has fined Santander UK nearly £108 million (US$133 million) for repeated anti-money laundering (AML) failures.

The regulator of financial services firms and financial markets in the UK says it found “serious and persistent gaps” in the bank’s AML controls related to business banking customers.

Ineffective systems

Between 2012 and 2017, Santander failed to properly oversee and manage its AML systems, which significantly impacted the account oversight of more than 560,000 business customers, according to an FCA statement.

It says Santander had ineffective systems to adequately verify the information provided by customers about the business they would be doing. The firm also failed to properly monitor the money customers had told them would be going through their accounts compared with what actually was being deposited.

Poor processes and structures

In one case, a new customer opened an account as a small translations business with expected monthly deposits of £5,000. Within six months it was receiving millions in deposits, and swiftly transferring the money to separate accounts.

Although the account was recommended for closure by the bank’s own AML team in March 2014, poor processes and structures meant that this was not acted upon until September 2015. As a result, the customer continued to receive and transfer millions of pounds through its account.

Failure to manage

Santander agreed to a request from law enforcement to keep the account open in September 2015, however, it failed to keep track of this request and the account remained open until the FCA wrote to Santander in December 2016.

The FCA also identified several other business banking accounts which Santander failed to manage correctly, leaving the bank open to serious money laundering risk.

The FCA’s Final Notice for Santander UK plc can be found here.

Categories: Trade Based Financial crimes News

Tags: AML, anti-money laundering, FCA, UK Financial Conduct Authority