| Link(s): | FCA fines Starling Bank £29m for failings in their financial crime systems and controls | FCA Final Notice 2024: Starling Bank Limited (fca.org.uk) |
Context
The FCA reviewed financial crime controls at challenger banks in 2021 and, during this review, identified serious concerns with Starling’s anti-money laundering and sanctions framework. The bank agreed to a requirement restricting it from opening new accounts for high-risk customers until this improved. The FCA has since fined Starling Bank Limited £28,959,426 for financial crime failings related to its financial sanctions screening.
Key points to note and next actions
In January 2023, Starling became aware that its automated screening system had only been screening customers against a fraction of the full list of those subject to financial sanctions, resulting in 54,000 accounts for 49,000 high-risk customers being opened between September 2021 and November 2023. A subsequent internal review identified systemic issues in its financial sanctions framework, which Starling reported to the relevant authorities.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, commented that “Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions. It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime.”
Highlighting the improvements it is making in the pace of its enforcement investigations, the FCA notes that the case against Starling took 14 months from opening to achieving an outcome, compared to an average of 42 months for cases closed in 2023/24.