Nationwide Building Society has been fined £44,078,500 by the UK’s Financial Conduct Authority (FCA) for “inadequate anti-financial crime systems and controls between October 2016 to July 2021”, the regulator says.
The FCA claims that during this period, Nationwide had “ineffective systems for keeping up-to-date due diligence and risk assessments for all its personal current account customers and for monitoring their transactions”, according to a press release from the watchdog.
Additionally, the FCA claims that Nationwide, the largest building society in the world with 605 branches, “was also aware that some of those customers were using their personal accounts for business activity, in breach of its terms”.
“Nationwide did not offer business current accounts at this point, so did not have the right processes in place to manage the financial crime risks from business activity,” the FCA adds.
The regulator continues: “This meant Nationwide was unable to effectively identify, assess, monitor or manage the money laundering risks among its personal current account customers. It also meant Nationwide did not have an accurate picture of its customers who presented a higher risk of financial crime.”
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, says: “Nationwide failed to get a proper grip of the financial crime risks lurking within its customer base. It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences.”
In response to the fine, a spokesperson for the building society says: “Nationwide identified these issues, which relate to controls in place before July 2021, through its own reviews, and voluntarily brought them to the attention of the FCA. The society cooperated fully with the FCA investigation, and we are sorry that our controls during the period fell below the high standards we expect.”
Due to its cooperation, Nationwide qualified for a 30% reduction in the fine, lowering the penalty from £62,969,297 to £44,078,500.
The Nationwide spokesperson adds: “Since 2021, Nationwide has invested significantly in all aspects of its economic crime control framework in order to ensure our systems are robust.
“We do not believe that these controls issues caused financial loss to any of our customers and remain committed to preventing economic crime and protecting our customers and the wider UK economy from fraud.”
Source: https://www.fintechfutures.com/
