Starling Bank, a popular app-based bank in the UK, has been fined £29 million by the Financial Conduct Authority (FCA) for serious breaches of financial sanctions screening. The FCA found that Starling had reported multiple potential breaches of financial sanctions despite being under scrutiny. The fine was reduced by 30% from £41 million as the bank agreed to resolve the issues.
Starling Bank has grown rapidly as an app-only offering, competing with traditional high-street lenders. However, concerns have been raised about the bank’s compliance with regulations. In 2021, the FCA identified serious concerns with their anti-money laundering and sanctions framework.
The bank agreed to regulatory restrictions, but still failed to comply and opened accounts for high-risk customers. The FCA found that Starling’s financial sanctions screening controls were shockingly lax, leaving the financial system vulnerable to criminals and individuals subject to sanctions.
The bank has committed to significant improvements in its financial crime compliance and has promised to conduct historic financial sanctions screening reviews of its entire customer base. The FCA also highlighted broader issues in the challenger bank sub-sector related to financial crime controls.
Starling Bank, in a statement, accepted the FCA’s findings and apologized for the failings. The bank’s chairman, David Sproul, reassured customers and employees that the issues were historic and that changes have been made to strengthen risk management and control frameworks. The bank has also agreed to invest more in financial crime compliance and conduct additional screening reviews.
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