The UK’s Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro Bank due to deficiencies in its financial crime controls, stemming from issues with a transaction monitoring system that was implemented in 2016.
According to the FCA, from June 2016 to December 2020, Metro failed to implement adequate systems and controls to monitor over 60 million transactions, totaling more than £51 billion, for potential money laundering risks.
Metro Bank automated its monitoring of customer transactions for signs of financial crime in June 2016. However, the system malfunctioned due to an error in data input, preventing transactions that occurred on the same day an account was opened, as well as subsequent transactions until the account was updated, from being monitored.
Concerns about the lack of oversight on certain transaction data were raised by junior staff in 2017 and 2018, but these issues were not addressed, according to the regulator. Even after a fix was implemented in July 2019, Metro failed to establish a reliable mechanism to ensure that all relevant transactions were consistently monitored until December 2020—over four and a half years after the system was first adopted.
Therese Chambers, the joint executive director of enforcement and market oversight, noted, “Metro’s failings risked a gap being left in our defense against the criminal misuse of our financial system. Those failings went on for too long.”
Initially, Metro Bank faced a potential fine of £23,821,700, but by agreeing to rectify the issues, the bank received a 30% discount on the penalty.