The Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro Bank for significant failings in its anti-money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term controls that left over £51 billion in transactions inadequately monitored over a four-year period.

Metro Bank Hit With £16.7m Fine Over AML Control Failures

The regulatory action follows an investigation that revealed Metro Bank failed to properly monitor more than 60 million transactions between June 2016 and December 2020 due to fundamental flaws in its automated transaction monitoring system.

The investigation uncovered a critical error in the bank's data processing that prevented the monitoring of transactions made on the same day accounts were opened. This technical flaw, known internally as the “Time Stamp Code Logic Error,” went undetected for nearly three years despite early warnings from junior staff members.

“Metro's failings risked a gap being left in our defense against the criminal misuse of our financial system,” commented Therese Chambers, joint executive director of enforcement and market oversight. “Those failings went on for too long.”

The problems began when Metro Bank implemented its Automated Transaction Monitoring System in June 2016. A coding error meant that when customers opened accounts and conducted transactions on the same day, the system failed to capture these activities for monitoring. The issue persisted until July 2019, when a partial fix was implemented.

This is another fine the FCA has issued to the financial institution in the past month. Wise plc CEO Kristo Käärmann was fined £350,000 in late October for failing to disclose significant tax issues, a considerably smaller amount than Metro Bank’s latest penalty.

Moreover, this isn't the first time Metro Bank has faced FCA sanctions. In December 2022, the regulator fined the institution over £10 million for providing incorrect information to investors. Additionally, the FCA sanctioned former Metro Bank executives Craig Donaldson and David Arden for “knowingly being concerned” in breaches of listing rules. Donaldson was fined £223,100, while Arden received a £134,600 penalty.

The Fine Could Be Higher

Even after identifying the problem, Metro Bank did not establish consistent verification procedures to ensure all transactions were being properly monitored until December 2020, more than four years after the system's initial implementation.

Internal documents reveal that junior staff members raised concerns about data monitoring gaps in 2017 and 2018, but their warnings failed to prompt adequate investigation or remediation by senior management. The issue was notably removed from the minutes of a January 2018 Financial Crime Steering Group meeting, effectively burying the warning signs.

The fine would have been £23.8 million, but Metro Bank received a 30% discount for agreeing to resolve the matter early. The bank has since implemented new processes to address the identified issues and strengthen its financial crime controls.

Despite the “discount,” the fine imposed on Metro Bank is among the highest in 2024. Only Starling Bank received a higher penalty in September, nearly £29 million, and Citigroup in May, £28 million.