Starling Bank Slapped with £29 Million Fine Over Lax Money Laundering Controls
Britain’s financial watchdog, the Financial Conduct Authority (FCA), has hit Starling Bank with a whopping £29 million fine (£38.5 million) after a brutal review exposed shocking weaknesses in its anti-money laundering and sanctions screening systems. The FCA slammed the digital lender for leaving the financial system “wide open to criminals.”
Massive Failure to Stop High-Risk Accounts
The watchdog revealed that between September 2021 and November 2023, Starling opened over 54,000 accounts for 49,000 high-risk customers. The bank’s rapid growth outpaced its safeguards, repeatedly breaching rules barring accounts for risky clients.
The FCA initially flagged problems back in 2021 during a wider crackdown on challenger banks. It later emerged in January 2023 that Starling’s automated sanctions checks had only been running partial screenings of those on financial sanctions lists since 2017 – a major oversight exposing the financial system to abuse.
“Shockingly Lax Controls,” FCA Says
“Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions,” said Therese Chambers, joint executive director at the FCA. “Starling also failed to meet FCA requirements designed to lower the risk of financial crime.”
Starling Scrambles to Fix Mess
Starling Bank has accepted the FCA’s findings and promised swift action. It is now carrying out a detailed re-screening of transactions and reviewing past accounts to identify breaches. Chairman David Sproul apologised:
“I apologise for the failings outlined by the FCA. We are investing heavily to fix these issues, including strengthening our board governance and capabilities.”
The FCA’s investigation sends a clear message: as digital banks grow fast, their crime-fighting measures must keep pace – or face severe penalties.
