| Link(s): | FCA fines Nationwide £44m for failings in financial crime controls | FCA Final Notice 2025: Nationwide Building Society |
Context
The FCA has fined Nationwide Building Society £44m for inadequate anti-financial crime systems and controls between October 2016 to July 2021. Nationwide is the world’s largest building society. By 1 July 2021 it had approximately 18 million UK customers and £170 billion in customer deposits across its products. It held a 10%
market share of UK current accounts, which had grown significantly over the previous 4½ years from approximately 7%.
Key points to note and next actions
Nationwide would have been fined £62,969,297, but it agreed to resolve these matters and so qualified for a 30% discount under the FCA’s processes.
During this period, Nationwide had ineffective systems for keeping up-to-date due diligence and risk assessments for all its personal current account customers and for monitoring their transactions.
Nationwide was also aware that some of those customers were using their personal accounts for business activity, in breach of its terms. Nationwide did not offer business current accounts at this point, so did not have the right processes in place to manage the financial crime risks from business activity.
This meant Nationwide was unable to effectively identify, assess, monitor or manage the money laundering risks among its personal current account customers. It also meant Nationwide did not have an accurate picture of its customers who presented a higher risk of financial crime.
In one serious case, Nationwide missed opportunities to identify a customer using personal current accounts to receive fraudulent Covid furlough payments. The customer received 24 payments totalling £27.3m over 13 months, with £26.01m of this deposited over 8 days. HMRC recovered £26.5m, but approximately £800,000 remains unrecovered.