Starling Bank has been fined £29 million by the UK’s financial watchdog for failings over its financial crime screenings, which the regulator described as “shockingly lax”.
The Financial Conduct Authority (FCA) said the bank “left the financial system wide open to criminals and those subject to sanctions”.
Starling had only been screening customers against a fraction of the full list of those subject to financial sanctions, the FCA found.
It also repeatedly breached a requirement not to open accounts for high-risk customers.
Some 54,000 accounts were opened for 49,000 high-risk customers between September 2021 and November 2023, according to the watchdog’s investigation.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “Starling’s financial sanction screening controls were shockingly lax.
“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.”
Starling said it accepts that failings took place between December 2019 and November 2023.
The bank said it has introduced “extensive additional safeguards” to ensure it complies with regulatory requirements.
Chairman David Sproul said: “I would like to apologise for the failings outlined by the FCA and to provide reassurance that we have invested heavily to put things right, including strengthening our board governance and capabilities.
“We want to assure our customers and employees that these are historic issues.
“We have learned the lessons of this investigation and are confident that these changes and the strength of our franchise put us in a strong position to continue executing our strategy of safe, sustainable growth, supported by a robust risk management and control framework.”
