In an announcement, the FCA revealed that between 31st December 2012 and 18th October 2017, Santander did not efficiently manage its AML systems, which impacted the account oversight of more than 560,000 business customers.

The statement reads: “Santander had ineffective systems to adequately verify the information provided by customers about the business they would be doing. The firm also failed to properly monitor the money customers had told them would be going through their accounts compared with what actually was being deposited.”

The FCA highlighted one case where a new customer had opened an account as a small translations business with expected monthly deposits of £5,000. However, within six months it was receiving millions in deposits, and subsequently transferring the money to separate accounts to avoid detection.

The account was recommended for closure by Santander’s AML team in March 2014, but inefficient processes meant that no action was taken until September 2015. During this time, the customer continued to receive and transfer millions of pounds. In September 2015, law enforcement advised Santander to keep the account open, but the bank failed to keep track and this account remained open until the FCA wrote to Santander in December 2016.

During this time, the FCA found several other Business Banking accounts that the bank failed to follow up on suspicious activity, leaving the bank open to money laundering risk. This led to over £298 million passing through the bank before it closed the accounts.

Santander was aware that there were significant weaknesses in its AML systems and a programme of improvements ensued in 2013. While there were minor improvements, the bank realised that these actions did not adequately address the underlying weaknesses and, in 2017, a comprehensive restructuring started – a programme that Santander continues to invest in.

Santander has not disputed the FCA’s findings and has agreed to settle, which means it has qualified for a 30% discount. Without the discount, the financial penalty would have been £153,990,400.

In the past, the FCA have fined Standard Chartered Bank £102.2 million for failing AML systems, HSBC Bank plc £63.9 million, NatWest £264.8 million.

Mark Steward, executive director of enforcement and market oversight at the FCA, says: “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.”