Metro Bank has been fined £16m by the UK financial regulator due to inadequate criminal transaction monitoring.
The Financial Conduct Authority (FCA) handed the bank the fine over its failure to adequately monitor more than 60 million transactions, worth over £51bn, for money laundering risks.
The inadequate anti-money laundering monitoring took place between June 2016 and December 2020.
According to the FCA, Metro Bank automated its monitoring system for customer transactions in 2016, which did not work as intended.
Due to an error in how transaction data was fed into the new system, it was unable to monitor payments made on the same day an account was opened and any subsequent payment until the account record was updated.
The FCA said junior staff at Metro did raise concerns about some transactions being missed by the system, however, the bank was unable to identify the issue.
Metro implemented a fix in 2019, however, the financial watchdog said after this solution, the bank was still unable to reliably check all relevant transactions were being fed into the automated system.
“Metro’s failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long,” said Therese Chambers, joint executive director of enforcement and market oversight.
Metro Bank was granted a discounted fine, down from £23.8m due to its compliance with the FCA’s processes.
The fine comes amid major pressure from regulators and consumers for financial institutions to tackle fraud.
Some banks, notably Revolut, have called for a revaluation of the onus of companies in other sectors to tackle fraud. The fintech giant argued social media companies like Meta provided the platforms for the vast majority of fraud cases.
Last week, the FCA convicted two fraudsters for operating an illegal crypto investment scam that pulled in £1.5m.
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