Metro Bank fined more than £16m for money-laundering failures

Metro Bank has been fined more than £16m after failing to carry out adequate anti-money laundering checks for nearly four years.

The bank failed to have the right systems and controls to adequately monitor over 60 million transactions, with a value of over £51bn, for money laundering risks, the Financial Conduct Authority (FCA) said.

Metro automated the system of monitoring of banking transactions for potential financial crime in June 2016. However, its system did not work as intended.

An error in how information was fed into the Bank’s IT system meant transactions taking place on the same day an account was opened, and any further transactions until the account record was updated, were not monitored.  

Junior bank staff raised concerns about some transaction data not being monitored in 2017 and 2018, but Metro failed to follow up on the reports which meant the issue was not identified and rectified.

The FCA said even after a solution was put in place in July 2019, the challenger bank failed to have a system in place to consistently check that all relevant transactions were being fed into the monitoring system until December 2020, over 4 and a half years after the system was implemented.  

Since identifying the issues, Metro Bank has put in place processes to remediate the flaws, the watchdog said.

“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,” Therese Chambers, joint executive director of enforcement and market oversight said in a statement.

Metro Bank’s £16.7m fine was reduced by 30 per cent because it agreed to the enforcement action early, the FCA said.

In March, Metro Bank returned to profit for the first time since 2018 after announcing up to 1,000 job cuts. The high-street lender said it will cut more than a fifth (22%) of its 4,266-strong workforce – more than it said it initially planned.

Daniel Frumkin, Metro Bank chief executive, said: “The conclusion of these enquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid. We are continuing, at pace, our shift towards higher yielding specialist mortgages and commercial, corporate and SME lending with a strong pipeline of business.”

“In line with the upgraded guidance provided at half year results, we have today also announced a return to underlying profitability in October, reflecting the significant progress made in delivering on the bank’s strategic priorities. Our relationship-led banking model will allow Metro Bank to go from strength to strength as we forge ahead with our growth agenda and progress towards long term sustainable profitability.”