Metro Bank has received a significant financial penalty from the UK financial regulator.
- The Financial Conduct Authority (FCA) fined Metro Bank £16 million for its inadequate monitoring of transactions.
- Failures in Metro Bank’s automated crime prevention system spanned from June 2016 to December 2020.
- Issues persisted even after the bank implemented a fix in 2019, raising concerns about financial security.
- This penalty highlights ongoing regulatory pressure on financial institutions to tighten anti-fraud measures.
Metro Bank was fined £16 million by the Financial Conduct Authority (FCA) due to shortcomings in its transaction monitoring system. Over 60 million transactions, valued at more than £51 billion, were not properly scrutinised for risks related to money laundering from June 2016 to December 2020. This fine was primarily attributed to the failure to detect and address errors in the bank’s automated system, which was unable to track payments correctly when accounts were opened.
Metro Bank’s automated crime prevention system, put in place in 2016, failed to operate as intended. An issue with how transaction data was processed resulted in its inability to monitor same-day payments on new accounts and any subsequent transactions until the account record was updated. Despite junior staff raising concerns, the root cause was not identified in a timely manner.
A solution was introduced in 2019; however, the FCA noted that the bank was still unable to ensure all relevant transactions were entered into the monitoring system reliably. “Metro’s failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long,” stated Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
In response to its compliance with the investigation process, the FCA reduced Metro Bank’s fine from an initial amount of £23.8 million. The case underscores the intense pressure on banks from regulators and consumers to enhance their fraud prevention practices. Other financial entities, including Revolut, have also called for a reassessment of responsibilities across various sectors in the battle against fraud.
This penalty serves as a stark reminder of the ongoing demands on banks to fortify their defences against financial crime.
