FCA Hits Metro Bank with £16 Million Fine Over Financial Crime Controls Lapses

The Financial Conduct Authority (FCA) has handed Metro Bank PLC a £16,675,200 fine, accusing it of leaving the door wide open to potential money laundering risks due to poor transaction monitoring systems that went unchecked for over four years.

The hefty penalty follows the revelation that Metro Bank’s automated system, meant to monitor customer transactions for financial crime, had a glaring flaw dating back to June 2016. This flaw meant any transactions made on the same day as an account opening — and even subsequent ones until an account update — slipped under the radar. In total, more than 60 million transactions worth over £51 billion dodged proper scrutiny, a staggering oversight given today’s intense regulatory focus on financial crime prevention.

What makes this story even more frustrating is that Metro’s junior staff actually raised red flags about unmonitored transactions back in 2017 and 2018. Despite these alerts, the issues went unaddressed. It wasn’t until April 2019 that the bank took a closer look and realized the depth of the monitoring gap. Even after applying a fix in July 2019, Metro still lacked a way to consistently verify that all transactions were being captured until the end of 2020.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, didn’t mince words about Metro’s prolonged oversight, stating, “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.”

The FCA’s action against Metro is a clear message to the banking sector: leaving cracks in financial crime systems won’t be tolerated, especially as regulators tighten the screws on monitoring standards. While Metro has since put in place measures to prevent similar issues from arising, this penalty serves as a stark reminder of the importance of proactive, not reactive, monitoring systems.

For Metro, this penalty is a hard-hitting lesson in the high stakes of compliance, as the FCA keeps a watchful eye on firms’ defence against money laundering. The message is clear: banks that fail to plug the gaps in financial crime controls are likely to face substantial consequences.

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