Citing widespread weaknesses in its financial crime controls, the U.K.’s Financial Conduct Authority (FCA) hit Starling Bank Ltd. with a £29 million penalty.
The bank had agreed not to open accounts for high-risk customers after the regulator found serious weaknesses in Starling’s anti-money laundering and sanctions controls during a compliance sweep in 2021.
But the FCA found that the bank failed to comply with that requirement, opening accounts for 49,000 risky customers over a two-year period.
“Starling’s financial sanction screening controls were shockingly lax,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA, in a release.
“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,” she added.
The regulator’s fine included a 30% discount for the bank’s agreement to settle the case. Otherwise the fine would have been £40.96 million, the FCA said.
It also noted that the bank has since beefed up its controls.