Metro Bank faces a £16.7m fine from the FCA for failing to properly monitor over 60m transactions between 2016 and 2020.
The bank's automated monitoring system reportedly had significant unaddressed flaws despite early warnings.
The
Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro
Bank for significant failings in its anti-money laundering controls that left
over £51 billion in transactions inadequately monitored over a four-year
period.
Metro Bank Hit With £16.7m
Fine Over AML Control Failures
The
regulatory action follows an investigation that revealed Metro Bank failed to
properly monitor more than 60 million transactions between June 2016 and
December 2020 due to fundamental flaws in its automated transaction monitoring
system.
The
investigation uncovered a critical error in the bank's data processing that
prevented the monitoring of transactions made on the same day accounts were
opened. This technical flaw, known internally as the “Time Stamp Code
Logic Error,” went undetected for nearly three years despite early
warnings from junior staff members.
“Metro's
failings risked a gap being left in our defense against the criminal misuse of
our financial system,” commented Therese Chambers, joint executive director of
enforcement and market oversight. “Those failings went on for too
long.”
The
problems began when Metro Bank implemented its Automated Transaction Monitoring
System in June 2016. A coding error meant that when customers opened accounts
and conducted transactions on the same day, the system failed to capture these
activities for monitoring. The issue persisted until July 2019, when a partial
fix was implemented.
This is another fine the FCA has issued to the financial institution in the past month. Wise plc CEO Kristo
Käärmann was fined £350,000 in late October for failing to disclose significant
tax issues, a considerably smaller amount than Metro Bank’s latest penalty.
Moreover, this isn't the first time
Metro Bank has faced FCA sanctions. In December 2022, the regulator fined the
institution over £10 million for providing incorrect information to investors.
Additionally, the FCA sanctioned former Metro Bank executives Craig Donaldson
and David Arden for “knowingly being concerned” in breaches of listing rules.
Donaldson was fined £223,100, while Arden received a £134,600 penalty.
The Fine Could Be Higher
Even after
identifying the problem, Metro Bank did not establish consistent verification
procedures to ensure all transactions were being properly monitored until
December 2020, more than four years after the system's initial implementation.
Internal
documents reveal that junior staff members raised concerns about data
monitoring gaps in 2017 and 2018, but their warnings failed to prompt adequate
investigation or remediation by senior management. The issue was notably
removed from the minutes of a January 2018 Financial Crime Steering Group
meeting, effectively burying the warning signs.
The fine
would have been £23.8 million, but Metro Bank received a 30% discount for
agreeing to resolve the matter early. The bank has since implemented new
processes to address the identified issues and strengthen its financial crime
controls.
Despite the
“discount,” the fine imposed on Metro Bank is among the highest in
2024. Only Starling Bank received a higher penalty in September, nearly £29
million, and Citigroup in May, £28 million.
The
Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro
Bank for significant failings in its anti-money laundering controls that left
over £51 billion in transactions inadequately monitored over a four-year
period.
Metro Bank Hit With £16.7m
Fine Over AML Control Failures
The
regulatory action follows an investigation that revealed Metro Bank failed to
properly monitor more than 60 million transactions between June 2016 and
December 2020 due to fundamental flaws in its automated transaction monitoring
system.
The
investigation uncovered a critical error in the bank's data processing that
prevented the monitoring of transactions made on the same day accounts were
opened. This technical flaw, known internally as the “Time Stamp Code
Logic Error,” went undetected for nearly three years despite early
warnings from junior staff members.
“Metro's
failings risked a gap being left in our defense against the criminal misuse of
our financial system,” commented Therese Chambers, joint executive director of
enforcement and market oversight. “Those failings went on for too
long.”
The
problems began when Metro Bank implemented its Automated Transaction Monitoring
System in June 2016. A coding error meant that when customers opened accounts
and conducted transactions on the same day, the system failed to capture these
activities for monitoring. The issue persisted until July 2019, when a partial
fix was implemented.
This is another fine the FCA has issued to the financial institution in the past month. Wise plc CEO Kristo
Käärmann was fined £350,000 in late October for failing to disclose significant
tax issues, a considerably smaller amount than Metro Bank’s latest penalty.
Moreover, this isn't the first time
Metro Bank has faced FCA sanctions. In December 2022, the regulator fined the
institution over £10 million for providing incorrect information to investors.
Additionally, the FCA sanctioned former Metro Bank executives Craig Donaldson
and David Arden for “knowingly being concerned” in breaches of listing rules.
Donaldson was fined £223,100, while Arden received a £134,600 penalty.
The Fine Could Be Higher
Even after
identifying the problem, Metro Bank did not establish consistent verification
procedures to ensure all transactions were being properly monitored until
December 2020, more than four years after the system's initial implementation.
Internal
documents reveal that junior staff members raised concerns about data
monitoring gaps in 2017 and 2018, but their warnings failed to prompt adequate
investigation or remediation by senior management. The issue was notably
removed from the minutes of a January 2018 Financial Crime Steering Group
meeting, effectively burying the warning signs.
The fine
would have been £23.8 million, but Metro Bank received a 30% discount for
agreeing to resolve the matter early. The bank has since implemented new
processes to address the identified issues and strengthen its financial crime
controls.
Despite the
“discount,” the fine imposed on Metro Bank is among the highest in
2024. Only Starling Bank received a higher penalty in September, nearly £29
million, and Citigroup in May, £28 million.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
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Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
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📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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