The FCA has imposed a fine of £107,793,300 on Santander UK Plc due to deficiencies in its anti-money laundering (AML) controls that affected its business banking customers.
In an announcement, the FCA stated that from December 31, 2012, to October 18, 2017, Santander inadequately managed its AML systems, impacting account monitoring for over 560,000 business customers.
The FCA’s statement noted, “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 reported would be flowing through their accounts compared to what was actually deposited.”
One notable case involved a new customer who had set up an account as a small translation business with expected monthly deposits of £5,000. However, within six months, this account was receiving millions in deposits and subsequently transferring the funds to other accounts to evade detection.
Santander’s AML team recommended closure of the account in March 2014. However, due to inefficient processes, no action was taken until September 2015, allowing the customer to continue receiving and transferring millions of pounds. In September 2015, law enforcement advised the bank to keep the account open, but Santander did not effectively monitor the situation, and the account remained active until the FCA contacted them in December 2016.
During this period, the FCA identified several other business banking accounts with suspicious activity that Santander failed to investigate, significantly increasing the bank’s exposure to money laundering risks. This resulted in over £298 million flowing through the bank before the accounts were closed.
Santander acknowledged significant weaknesses in its AML systems and initiated a program of improvements in 2013. Though minor progress was made, the bank recognized that these measures did not sufficiently address the underlying issues, leading to a comprehensive restructuring that began in 2017 and continues to receive ongoing investment.
Santander has accepted the FCA’s findings and agreed to settle, qualifying for a 30% discount on the penalty. Without the discount, the total fine would have been £153,990,400.
In previous cases, the FCA has fined Standard Chartered Bank £102.2 million, HSBC Bank plc £63.9 million, and NatWest £264.8 million for similar AML failures.
Mark Steward, FCA’s executive director of enforcement and market oversight, stated: “Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime. As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls.”