The Financial Conduct Authority (FCA) recently levied a substantial £16,675,200 fine against Metro Bank PLC (Metro) for significant shortcomings in its financial crime prevention systems and controls. Between June 2016 and December 2020, Metro Bank failed to implement effective systems and controls, resulting in inadequate monitoring of over 60 million transactions worth more than £51 billion. This lapse created a potential risk for undetected money laundering activities.
Metro initially introduced an automated transaction monitoring system in June 2016. However, a critical error in the data feeding process meant that certain transactions were overlooked. Specifically, transactions that took place on the same day an account was opened, as well as subsequent transactions until account details were updated, bypassed the bank’s monitoring systems. This vulnerability allowed these transactions to proceed without the scrutiny required to detect potential financial crime risks and apply additional measures.
Concerns were raised by junior staff members in 2017 and 2018 regarding unmonitored transaction data. However, these warnings did not prompt immediate corrective action or a broader investigation into the system’s effectiveness. When a fix was eventually implemented in July 2019, Metro still lacked a consistent verification mechanism to ensure all relevant transactions were captured by the monitoring system. This deficiency persisted until December 2020, leaving over four and a half years with potential gaps in financial crime oversight.
Commenting on the case, Therese Chambers, joint executive director of enforcement and market oversight at the FCA, stated: “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.”
Metro Bank has since undertaken efforts to address and remediate these issues. Since identifying the monitoring system’s deficiencies in April 2019, Metro has implemented new processes aimed at enhancing its compliance framework. The FCA continues to closely supervise financial institutions to ensure robust systems and controls for managing financial crime risks.
How Neopay can help
At Neopay, we understand the critical importance of implementing effective financial crime prevention systems and controls that meet regulatory standards and ensure that the company, customers and other parties are adequately protected from financial crime. The FCA’s penalty against Metro Bank highlights the necessity of having robust and reliable controls in place, as well as the ability to swiftly respond to and rectify compliance issues when they arise. Our tailored solutions help businesses stay compliant through a holistic, adaptable approach.
- Proactive risk management: We help assess your business’s risk exposure, implementing frameworks that keep up with growth, high-risk customers, and evolving regulations to keep your compliance efforts ahead. This ensures that appropriate systems and controls are in place to identify, prevent and manage financial crime risks.
- Comprehensive audits and reviews: We conduct regular audits of your financial crime prevention systems, including AML, sanctions screening, and customer due diligence, ensuring your systems work as intended and meet the latest standards. This ensures that any deficiencies or gaps are swiftly identified.
- Training and Continuous Support: We provide training to keep your staff informed on regulatory changes and industry best practices, along with continuous support to help your team effectively manage financial crime risks. This helps your employees understand current initiatives, regulatory changes, and potential threats, supported by relevant case studies
If you would like to learn more about how Neopay can help strengthen your compliance framework and manage financial crime risks, contact our team here.
