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Santander UK has become the latest bank to be heavily fined by the country’s financial regulator over anti-money laundering failures.
The Financial Conduct Authority said on Friday it had fined the Spanish bank’s UK division £107.8mn for failing to properly manage its systems, which affected transactions with 560,000 business customers.
It is the largest fine Santander UK has received from the FCA and one of the regulator’s largest anti-money laundering fines.
The regulator found that between 2012 and 2017 the bank’s systems were not able to properly verify information provided by customers about their businesses.
Mark Steward, executive director of enforcement and market surveillance at the FCA, said, “Santander’s poor management of its anti-money laundering systems and its inadequate efforts to address problems have created a prolonged and serious risk of money laundering and financial crime.”
It’s the latest sign UK regulators are holding banks accountable for their failure to stem the flow of dirty money.
The FCA has previously taken action against three other UK lenders over their negligent anti-money laundering procedures.
It fined HSBC £64mn in December 2021 and reprimanded the bank for “serious weaknesses” in its anti-money laundering controls over an eight-year period.
In 2019, the FCA fined Standard Chartered £102mn following an investigation into the bank that found “significant deficiencies” that left the lender at risk of breaching sanctions.
NatWest was fined £264.7mn by a London court following an FCA investigation into NatWest pleading guilty to failing to stop an alleged £365mn money laundering scheme in which £700,000 was carried through shopping centers in black bin liners.
Deutsche Bank was handed the regulator’s biggest-ever anti-money laundering fine in 2017 after $10bn was transferred from Russia to offshore bank accounts. [was] Highly indicative of financial crime”. The German lender was fined £163mn.
The regulator pointed to a case at Santander UK involving a customer account with a small translation business. The company expected monthly deposits of £5,000 but within six months was receiving millions in deposits and quickly moving money elsewhere.
Although the bank’s anti-money laundering team identified the suspicious activity in March 2014, the request was not acted upon for another 18 months.
“As a result, the customer continued to receive and transfer millions of pounds through his account,” the FCA said.
In other examples, the bank failed to respond to red flags raised on suspicious accounts, resulting in £298mn passing through them before they were closed.
Santander UK chief executive Mike Regnier said: “We deeply regret the historic anti-money laundering-related control issues highlighted in the FCA’s findings in our business banking division between 2012 and 2017.
“While we took steps to address our AML issues after they were identified, we recognize that our AML framework should have been stronger at the time. We have since made significant changes to address these by overhauling our financial crime technology, systems and processes. “
Santander UK would have been fined £154mn, but received a 30 per cent discount because it did not dispute the FCA’s findings and agreed to settle.
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