Santander UK has been fined £107.8 million over “serious and persistent gaps” in its anti-money laundering controls, the financial watchdog has announced.
The Financial Conduct Authority (FCA) said business banking customers were affected by anti-money laundering failures.
It said the bank “failed to properly oversee and manage” these systems, which impacted its oversight of more than 560,000 business customers, between December 2012 and October 2017.
Santander had “ineffective” systems to adequately verify the information provided by customers about the business they were doing, the FCA said.
The failures led to more than £298 million passing through the bank before it closed accounts.
The watchdog highlighted that, in one case, a new customer opened an account as a small translations business with expected monthly deposits of £5,000, but within six months was receiving millions in deposits and swiftly transferred the funds to separate accounts.
This account was recommended for closure by the bank’s anti-money laundering team in March 2014 but it was not acted on until September 2015 due to “poor processes”, the FCA said.
Mark Steward, executive director of enforcement and market oversight at the FCA, 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.
“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.”
“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.
“Today over 4,400 staff are focused on preventing financial crime and we continue to invest to meet our responsibilities and keep our customers and communities safe.”