Metro Bank has been Fined 16 Million Pounds by the FCA for Inadequate Financial Crime Prevention

Metro Bank PLC has been fined GBP 16,675,200 by the FCA for maintaining inadequate systems to prevent financial crimes. 

About the Penalty on Metro Bank

Metro Bank was found to have failed to properly monitor 60 million transactions to ensure that they were not part of any money laundering schemes. The value of these transactions, taken together, amounts to over GBP 51 billion. This failure took place between June 2016 to December 2020 which means that the failure continued for an extended period of time. 

In June 2016, Metro Bank introduced a new automated system for monitoring these transactions to prevent money laundering. However, due to a glitch in the new system, any transactions that would take place on the day that the account was opened would not be recorded or tracked or monitored by the system. Further, the system would ignore any further transactions until the account record was updated. 

In 2016 and 2017, members of the junior staff of Metro Bank did alert the bank that the automated money laundering prevention system was not working as intended. Several transactions were being left unrecorded. However, Metro Bank did not pay attention to the issue. 

In 2019, a fix was supposed to have been put in place by the bank. However, yet again, the bank failed to recheck whether the system was working as intended. Many transactions still managed to fall through the cracks. Hence, there was a repeated failure of the bank to comply with regulations set by the FCA to prevent money laundering. 

The FCA has heard and considered the matter and has deemed to levy a financial penalty. The FCA is also monitoring and reviewing Metro Bank’s efforts to have proper systems in place to prevent money laundering. 

Impact on the Financial System 

Prevention of Financial Crimes 

One of the primary duties of any financial regulator is to prevent financial crimes. A system that allows financial crimes to take place can cause unmediated harm to the overall financial ecosystem which can harm the progress of a country. This ruling solidifies the FCA’s position as a tier-1 regulator for having identified an issue with a bank and having taken the necessary steps to correct it. 

Higher Trust 

A financial regulator needs to ensure that consumers and various stakeholders trust the financial system of their country. The FCA’s actions have restored trust in the system as the FCA has made it clear that it will take all necessary steps to ensure the sound and proper working of the financial system of the UK. 

About Metro Bank 

Metro Bank PLC is a commercial and retail bank that operates in the United Kingdom. The bank was founded in 2010. It is the first high street bank to have launched operations in the United Kingdom in 150 years. The bank is listed on the London Stock Exchange and has its headquarters in London. 

Summing Up 

The FCA’s ruling instils higher confidence in the banking and financial system of the UK. The FCA has shown great care in identifying the issue and prosecuting it until a fair result is announced. The FCA’s decision to continue monitoring Metro Bank to ensure that it takes corrective action can also be lauded.