The UK’s Financial Conduct Authority (FCA) has fined the UK arm of Spanish banking heavyweight Santander £107.7 million for “repeated” anti-money laundering (AML) failures, saying it found “serious and persistent” gaps in the bank’s AML controls.

The regulator says between 31 December 2012 and 18 October 2017, Santander failed to adequately manage its AML systems, affecting more than 560,000 business accounts.

Santander has not disputed the FCA’s findings and agreed to settle, which means it has qualified for a 30% discount on the fine. Without the discount, the financial penalty would have been £153,990,400 rather than £107,793,300.

FCA executive director of enforcement and market oversight, Mark Steward, says: “Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime.”

The FCA says Santander’s systems did not adequately verify customer information regarding the kind of business they would be doing and also did not properly compare the money in people’s accounts against what customers said would be deposited.

The regulator highlights one instance in which a new customer opened an account as a small translations business with expected monthly deposits of £5,000. Within six months, it was receiving millions in deposits, and swiftly transferring the money to separate accounts.

Despite the bank’s AML team recommending the account be closed in March 2014, the FCA says it remained open until September the following year.

The regulator adds it “identified several other business banking accounts which Santander failed to manage correctly, leaving the bank open to serious money laundering risk”, and there were “also examples of the bank failing to promptly deal with ‘red flags’ associated with suspicious activity, such as automated monitoring alerts”.

It says these failures led to more than £298 million passing through the bank before it closed the accounts.

Source: fintechfuture