| Link(s): | FCA fines Metro Bank £16m for financial crime failings | FCA Final Notice 2024: Metro Bank plc |
Context
The FCA has fined Metro Bank £16m for failing to have the right systems and controls in place to adequately monitor over 60m transactions, with a value of over £51bn, for money laundering risks between June 2016 and December 2020. The failings were borne out of systems inadequacies which, although identified, were not corrected. Metro agreed to resolve this matter, thereby being allowed a ‘discount’ on the fine (which would otherwise have been just over £23.8m).
Key points to note and next actions
- Metro automated the monitoring of customer transactions for potential financial crime in June 2016, but an error in how data was fed into the 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 staff did raise concerns about some transaction data not being monitored in 2017 and 2018, but these did not result in the issue being identified and fixed.
- Even once a fix had been put in place in July 2019, Metro did not have a mechanism 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.
The message for firms is that new systems implementations should be fully tested and all issues understood and rectified prior to implementation. Real end-user acceptance testing (so testing involving the staff actually using the system at the ‘sharp end’) is key.