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Highlights
- £16.6M Fine: FCA penalizes Metro Bank for inadequate anti-money laundering systems affecting over £51 billion in transactions.
- System Flaws Unaddressed: Issues persisted for over four years due to data input errors and ineffective monitoring.
- Remedial Measures Taken: Since 2019, Metro Bank has introduced processes to address these regulatory concerns.
The Financial Conduct Authority (FCA) has issued a £16.6 million fine to Metro Bank PLC (LSE:MTRO), citing severe deficiencies in the bank's anti-money laundering systems between June 2016 and December 2020. The FCA’s investigation revealed that Metro Bank’s monitoring system failed to track approximately 60 million transactions valued at over £51 billion, leaving significant risks for potential money laundering activity unaddressed.
Metro Bank automated its transaction monitoring in June 2016, intending to strengthen its ability to detect suspicious activity. However, a critical data error prevented the system from monitoring transactions occurring on the same day an account was opened and subsequent transactions until account records were updated. Junior staff flagged data-monitoring concerns in 2017 and 2018, yet these did not lead to a full investigation or immediate correction.
The bank implemented a partial fix in July 2019, but it lacked a mechanism to verify that all relevant transactions were consistently being fed into the monitoring system. This issue remained unresolved until December 2020, over four years after the system's introduction. Therese Chambers, FCA’s joint executive director of enforcement, expressed concern over the prolonged gaps, noting that "Metro’s failings risked a gap being left in our defense against the criminal misuse of our financial system."
Since identifying these issues in April 2019, Metro Bank has taken steps to improve its monitoring systems and has implemented remedial measures. The FCA remains focused on ensuring that financial institutions, including Metro, maintain robust systems to detect and manage financial crime risks.a
