The Financial Conduct Authority (FCA) of the UK has imposed a fine of £107.79m on Santander UK for repeated and serious failure in its anti-money laundering (AML) controls.
The FCA said that the laxity in AML controls affected the accounting oversight of over 560,000 business customers.
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In its investigation, the regulator found that between 31 December 2012 and 18 October 2017, the bank lacked appropriate mechanisms to sufficiently validate the data supplied by clients regarding the business they would be conducting.
Additionally, the UK arm of the Spanish bank failed to keep track of the amount that customers said would be deposited and the amount of money that was being deposited.
“In one case, a new customer opened an account as a small translations business with expected monthly deposits of £5,000. Within six months it was receiving millions in deposits, and swiftly transferring the money to separate accounts,” the regulator said.
The FCA found that Santander UK improperly managed several additional business accounts and cases where the bank failed to deal with ‘red flags’ associated with suspicious activity.
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By GlobalDataThese issues led to over £298m passing through the bank, which did not dispute the FCA’s findings and agreed to settle the probe.
FCA executive director of enforcement and market oversight Mark Steward said: “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.
Santander UK CEO Mike Regnier said: “We are very sorry for the historical Anti-Money Laundering (AML) related controls issues in our Business Banking division between 2012-17 highlighted in the FCA’s findings.
“While we took action to address our AML issues once they were identified, we accept that our AML framework at the time should have been stronger. We have since made significant changes to address this by overhauling our financial crime technology, systems and processes.”
Last December, NatWest was fined £264.7m for failing to prevent money laundering of approximately £365m.
