UK’s FCA Fines Metro Bank $21 Million for Money Laundering Protection Lapses

The United Kingdom’s finance regulator fined Metro Bank for failing to monitor money laundering risks.

The Financial Conduct Authority said Metro must pay 16.7 million pounds (about $21 million) for a lack of proper money laundering protections on 60 million transactions between 2016 and 2020, according to a Tuesday (Nov. 12) press release.

“Metro’s failings risked a gap being left in our defense against the criminal misuse of our financial system,” Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, said in the release. “Those failings went on for too long.”

Metro automated the monitoring of transactions for financial crime in June 2016, although the system did not work as planned, per the release.

Because of an error in how data was inputted into the system, transactions taking place on the day an account was opened — and any other transactions until the account record was updated — were not tracked, the release said. While staff raised concerns about the issue in 2017 and 2018, the problem was not fixed.

When a fix was found in July 2019, Metro didn’t have a way to consistently determine that relevant transactions were added to the monitoring system until December 2020, according to the release.

Metro Bank issued a statement Tuesday saying that it accepts the FCA’s findings and has cooperated with the regulator’s investigation.

“The conclusion of these inquiries 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,” Metro CEO Daniel Frumkin said in the statement.

The bank added that since 2020 it has “resolved transaction monitoring system failings and made transaction monitoring enhancements.”

As PYMNTS wrote earlier this year: “Enforcement actions and fines from regulators … highlight the growing scrutiny on anti-money laundering (AML) efforts.”

Last month, for example, the U.S. federal government issued a $3 billion penalty to TD Bank for its AML failures.

Also last month, the FCA fined Starling Bank 29 million pounds related to its financial crime controls, which the regulator called “shockingly lax.”