City watchdog the Financial Conduct Authority (FCA) said business banking customers were affected by anti-money laundering failures. It said the Spanish-owned bank “failed to properly oversee and manage” these systems, which impacted its oversight of more than 560,000 business customers. Santander had “ineffective” systems to adequately verify the information provided by customers about the business they were doing, the FCA noted. Those failures led to more than £298m passing through the bank before it closed accounts.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “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. As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls.”
The FCA noted that in one case, 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.
Santander UK chief executive Mike Regnier said: “Santander takes its responsibilities regarding financial crime extremely seriously. We are very sorry for the historical anti-money laundering (AML) related controls issues in our business banking division between 2012-17 highlighted in the FCA’s findings. While we took action to address our AML issues once they were identified, we accept that our AML framework at the time should have been stronger. We have since made significant changes to address this by overhauling our financial crime technology, systems and processes. Today over 4,400 staff are focused on preventing financial crime and we continue to invest to meet our responsibilities and keep our customers and communities safe.”
Santander Group, including Santander UK, stressed that it was “fully committed to the fight against financial crime” and would continue to meet all applicable financial crime regulations and legislation internationally and “ensure effectiveness in its control environment”.