Metro Bank Fined Over £16m After Financial Crime-Monitoring Loophole Existed for Over Four Years

Metro Bank PLC has been fined £16,675,200 by the UK's Financial Conduct Authority (FCA) for inadequate money laundering risk monitoring measures.

According to the announcement issued by the UK regulator, between June 2016 and December 2020, Metro Bank failed to use the right systems and appropriate methods against money laundering risks, resulting in transactions worth more than £51 billion not being subject to financial crime monitoring procedures.

In June 2016, Metro Bank introduced an automated system for monitoring customer transactions, but the system did not work as expected. Due to a data entry error, transactions carried out on the day a bank account was opened, as well as any transactions carried out before account records were updated, were not monitored.

The error resulted in 60 million transactions valued at over £51 billion being unmonitored for financial crime.

While some bank employees raised concerns about unmonitored transaction data in 2017 and 2018, the Bank started to fix it in 2019. It was not until the end of 2020 that the bank put systems in place to monitor all relevant transactions.

Metro Bank breached Principle 3 of the FCA’s Principles for Businesses and was fined £23,821,700. The FCA reduced the fine by 30% as the bank agreed to address the issues.

Therese Chambers, joint executive director of enforcement and market oversight, believes the loophole went on for too long and could lead to financial system abusement by criminals.