Metro Bank has been fined £16.6 million by the Financial Conduct Authority (FCA) due to severe shortcomings in its anti-money laundering (AML) systems between 2016 and 2020. These lapses in regulatory compliance allowed gaps in transaction monitoring for more than 60 million transactions, totaling over £51 billion. This situation persisted for four years, despite warnings from junior staff in 2017 and 2018, underscoring concerns about governance and compliance oversight within the bank.
The FCA highlighted that Metro Bank automated its AML monitoring in 2016. However, this system faced a critical flaw: many transactions, including those made on the same day as account openings, went unmonitored due to data input errors. Although issues were flagged internally, they were not fully addressed until 2019, when Metro Bank implemented a partial fix. A comprehensive monitoring system was not established until the end of 2020.
Therese Chambers, FCA’s joint executive director of enforcement, emphasized the potential risks posed by these failures, which left “a gap in our defense against the criminal misuse of our financial system.” She also noted the extended duration of these failings, calling for stricter adherence to regulatory standards to prevent financial crime.
Metro Bank’s penalty could have reached £23.8 million, but the bank’s cooperation with the investigation resulted in a 30% reduction in fines. This case aligns with a broader crackdown by UK regulators, with recent penalties issued to several other institutions for breaches in AML and financial reporting standards.
For financial institutions, the case serves as a reminder of the critical importance of robust and responsive AML systems. It also highlights the FCA’s stance on accountability, urging firms to implement rigorous compliance measures to protect the integrity of the financial system.