(Alliance News) - The Financial Conduct Authority on Friday said it fined Santander UK PLC over "serious and persistent gaps" in its anti-money laundering controls, while Santander UK said it accepted the fine.
The UK finance watchdog fined the UK arm of Spanish financial services company Banco Santander SA GBP107.7 million, saying Santander UK's failures significantly affected account oversight of more than 560,000 business customers.
Santander UK said it accepted the FCA's findings regarding its business banking division from December 2012 to October 2017. It said it co-operated fully with the FCA investigation and received a 30% discount for agreeing to settle. Had it not, the financial penalty would have been GBP154.0 million.
The FCA noted one example of a new customer opening an account as a small translations businesses, expecting monthly deposits of GBP5,000. Within six months, it was receiving millions in deposits and transferring money to separate accounts.
The account was recommended for closure by Santander UK's anti-money laundering team in March 2014, but this was not acted on until September 2015. Santander UK then agreed to a law enforcement request to keep the account open in September 2015, but failed to keep track of this request until the FCA wrote to Santander UK in December 2016.
"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," said Mark Steward, executive director of enforcement and market oversight at the FCA.
Santander UK Chief Executive Officer Mike Regnier said: "While we took action to address our anti-money laundering issues once they were identified, we accept that our anti-money laundering 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 UK said the FCA concluded its investigation and no further action is anticipated.
Shares in Banco Santander were down 1.2% to 238.15 pence each in London on Friday morning.
By Greg Rosenvinge, Alliance News reporter
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