Starling Bank fined £29m for ‘shockingly lax’ risk controls – BNN Bloomberg

On October 2, 2024By Rgal Nv

(Bloomberg) — Starling Bank was fined £29 million ($38.5 million) for what regulators described as “shockingly lax” controls over risky customers.

The British lender had agreed to restrict new services aimed at high-risk customers in 2021 after the Financial Conduct Authority raised concerns about its money laundering and sanctions controls.

Despite this, the bank opened more than 54,000 accounts for 49,000 of these customers between September 2021 and November 2023, including 294 customers who had already been excluded by Starling for financial crime reasons, according to the regulator.

Starling discovered last year that its automated monitoring system had, since 2017, only checked customers against a fraction of the full financial sanctions list, the FCA added.

“Starling’s financial sanctions screening checks were shockingly lax,” said Therese Chambers, co-executive director of enforcement and market oversight at the FCA. “This has left the financial system wide open to criminals and those facing sanctions. This made the situation worse by failing to properly comply with the FCA requirements it had agreed to, which were put in place to reduce the risk of Starling facilitating financial crime.

Starling Bank said in a statement on Wednesday that it fully accepted the FCA’s findings, adding that it “regrets and apologizes” for its shortcomings. Starling paid the fine, improved its controls and also invested in strengthening the governance and capacity of its board, according to Chairman David Sproul.