The regulator found ‘serious and persistent gaps’ in the bank’s AML controls between December 31, 2012, and October 18, 2017, affecting over 560,000 business banking customers.
The Financial Conduct Authority has imposed a fine of £107.79 million on Santander UK for failure to properly oversee and manage its anti-money laundering (AML) systems, which significantly impacted the account oversight of more than half a million business customers.
The regulator found ‘serious and persistent gaps’ in the bank’s AML controls between December 31, 2012, and October 18, 2017, affecting over 560,000 business banking customers.
Santander has not disputed the FCA’s findings and agreed to settle, which means it has qualified for a 30% discount. Without the discount, the financial penalty would have reached almost £154 million.
The FCA said Santander had ineffective systems to adequately verify the information provided by customers about the business they would be doing. It added that the firm also failed to properly monitor the money customers had told them would be going through their accounts compared with what actually was being deposited.
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, Mark Steward, executive director of enforcement and market oversight at the FCA, said. 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.
The FCA noted that Santander knew that there were significant weaknesses in its AML systems and controls and began a program of improvements in 2013. While these changes resulted in some improvements, Santander concluded that the changes did not adequately address the underlying weaknesses and, in 2017, decided to implement a comprehensive restructuring of its processes and systems.
Santander UK continues to invest in its ongoing transformation and remediation program, the regulator said.
