U.K. digital lender Starling Bank has been hit with a £29 million fine by the Financial Conduct Authority over weaknesses in its systems against financial crime. The regulator said it found that Starling failed to properly screen its customers against financial sanctions and onboarded accounts holding high-risk features.In response, Starling apologised for the failings and assured that it had remedied the issues. The chairman of the bank, David Sproul, said that these were historical problems, adding that the bank was in a solid position to continue its growth.
The probe into Starling's financial crime controls was initiated amid concerns about the strength of anti-money laundering and know-your-customer compliance systems at fintech firms. The regulator said Starling's systems had failed to keep pace with the rapid growth of the bank.
It had agreed to stop the opening of new accounts to high-risk customers, but further on, it continued opening such accounts for more than 54,000 persons. It also turned out that the automatic system in this bank screened the clients against only part of the full list of individuals and entities under financial sanctions.The FCA described Starling as "fully cooperative" in attempting to "remediate the breaches and improve its financial crime control framework". Yet the fine acts as a reminder of how vital robust compliance mechanisms are for all financial firms, but particularly for the often fast-moving world of fintech.
0 Comments