FCA fines Metro Bank £16.7m for 'financial crime failures'

The Financial Conduct Authority has fined Metro Bank £16.7m for failing to “adequately” monitor transactions worth over £51bn for money laundering risks.

The FCA's penalty will draw the attention of financial institutions' in-house lawyers responsible for monitoring customer transactions for potential financial crime.

The relevant Metro transactions took place between June 2016 and December 2020, the FCA said. In June 2016, Metro automated the monitoring of customer transactions for potential financial crimes – but the system did not work as intended.

The FCA added: “While junior staff raised concerns that some transaction data was not monitored in 2017 and 2018, these did not result in the issue being identified and addressed.”

Metro joins a growing list of banks that have been fined by the FCA so far in 2024 – including Starling Bank, which was fined £29 million in October, and TSB Bank, which was fined £29 million in October The same month she was fined £10.9 million over her treatment of clients in financial difficulty.

Adam McLaughlin, former AML compliance manager at JP Morgan and current global head of financial crime strategy at technology platform NICE Actimize, said Metro's fine had to be seen in the context of the FCA's crackdown on the fintech sector over the last two years .

“In the past, the FCA has looked at the HSBCs and JP Morgans of the world – yes, they do things wrong and are not always perfect, but they have tightened their controls,” he said.

“However, fintechs have sought rapid growth to challenge these incumbents, and often their growth spending exceeds their compliance spending.”

McLaughlin added: “Another challenge with fintechs is that they have not always paid as much for staff as in the big banks and end up with people who have little or not enough experience.”

Commenting on the FCA's penalty against Metro, Therese Chambers, the regulator's deputy director of enforcement and markets supervision, said: “Metro's failures risk creating a gap in our defenses against criminal abuse of our financial system.” These failures took time too long.”

The FCA said that since the bank identified the issues with its transaction monitoring system in April 2019, Metro has put processes in place to address the identified issues.

Daniel Frumkin, CEO of Metro Bank, commented: “The completion of these investigations puts a stop to this legacy issue and allows the bank to move forward and fully focus on the future, building on the solid foundations it has already laid . We are rapidly continuing our shift towards higher interest specialty mortgages and commercial, corporate and SME loans with a strong business pipeline.”