The Financial Conduct Authority has fined Metro Bank £16.7 million for failing to “adequately monitor” over £51 billion of transactions for money laundering risks.

The FCA’s fine will draw the attention of in-house lawyers at financial institutions who are responsible for monitoring customer transactions for potential financial crime.

The relevant Metro transactions occurred between June 2016 and December 2020, the FCA said. In June 2016, Metro automated the monitoring of customer transactions for potential financial crime—but the system did not work as intended.

The FCA added: “Junior staff did raise concerns about some transaction data not being monitored in 2017 and 2018, but these did not result in the issue being identified and fixed.”

Metro joins a growing list of banks that have been fined by the FCA in 2024 so far—including Starling Bank, which was fined £29 million in October, and TSB Bank, which was fined £10.9m in the same month over its treatment of customers in financial difficulty.

Adam McLaughlin, a former AML compliance manager at J.P. Morgan, and currently global head of financial crime strategy at technology platform NICE Actimize, said Metro’s fine should be seen in the context of an FCA crackdown on the fintech sector over the last two years.

“Historically, the FCA has looked at the HSBCs and J.P. Morgans of this world—yes, they get things wrong and are not always perfect, but they have strengthened their controls,” he said.

“However, fintechs have tried to pursue rapid growth to challenge these incumbents, and often their growth spend exceeds their spend on compliance.”

McLaughlin added: “Another challenge with fintechs is that they haven’t always paid as much for staff as they pay in the big banks, and end up with people who have little experience or not enough experience.”

Commenting on the FCA’s fine of Metro, the regulator’s joint executive director of enforcement and market oversight Therese Chambers commented: “Metro's failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.”

The FCA stated that since the bank’s identification of the issues with its transaction monitoring system in April 2019, Metro has put in place processes to remediate the issues identified.

Daniel Frumkin, Metro Bank’s CEO, commented: “The conclusion of these enquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid. We are continuing, at pace, our shift towards higher yielding specialist mortgages and commercial, corporate and SME lending with a strong pipeline of business.”