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Virtual Event Emporium > Blog > Insights > Starling Bank Faces £28.9 Million Fine from FCA over Financial Crime
Insights

Starling Bank Faces £28.9 Million Fine from FCA over Financial Crime

Pat Crawley
Last updated: October 3, 2024 11:01 am
Pat Crawley
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2024-10-03T13:01:46.332+02:00

Thursday, 03/10/2024 | 11:01 GMT by Tareq Sikder

  • The bank’s growth from 43K to 3.6 million customers outpaced improvements in its financial crime controls.
  • In January 2023, Starling found its screening system inadequately screened customers against sanctions.

Starling Bank

The Financial Conduct Authority (FCA) has imposed a fine of £28,959,426 on Starling Bank Limited. The fine is for failings related to financial crime, specifically concerning the bank’s financial sanctions screening process.

The FCA also found that Starling repeatedly breached a requirement prohibiting it from opening accounts for high-risk customers.

Starling’s High-Risk Account Openings

Starling Bank experienced rapid growth in its customer base, increasing from around 43,000 customers in 2017 to 3.6 million in 2023. However, the measures the bank implemented to fight financial crime did not keep pace with this expansion.

In 2021, the FCA reviewed the financial crime controls of various challenger banks and identified significant concerns regarding Starling’s anti-money laundering and sanctions framework.

As a result of these findings, the FCA mandated that Starling restrict the opening of new accounts for high-risk customers until improvements were made. Despite this requirement, Starling opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.

BREAKING: Starling Bank, which has major operations in Cardiff, has been fined by The Financial Conduct Authority (FCA) for financial crime failings related to its financial sanctions screening. https://t.co/JO3XrgHld0 pic.twitter.com/bUTP8RSNCW

— Insider (@insiderwales) October 2, 2024

FCA Investigation Takes 14 Months

In January 2023, Starling discovered that its automated screening system had only screened customers against a small portion of the complete list of individuals subject to financial sanctions since 2017.

An internal review revealed systemic issues within its financial sanctions framework. Following this review, Starling reported multiple potential breaches of financial sanctions to the appropriate authorities.

Therese Chambers, FCA, Source: LinkedIn

Therese Chambers, FCA, Source: LinkedIn

“Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions,” commented Therese Chambers, Joint Executive Director of Enforcement and Market Oversight.

“It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime.”

The investigation into Starling’s practices took 14 months, significantly shorter than the average of 42 months for cases concluded in 2023/24. In response to these findings, Starling Bank has implemented programs to address the breaches and improve its overall financial crime control framework.

The Financial Conduct Authority (FCA) has imposed a fine of £28,959,426 on Starling Bank Limited. The fine is for failings related to financial crime, specifically concerning the bank’s financial sanctions screening process.

The FCA also found that Starling repeatedly breached a requirement prohibiting it from opening accounts for high-risk customers.

Starling’s High-Risk Account Openings

Starling Bank experienced rapid growth in its customer base, increasing from around 43,000 customers in 2017 to 3.6 million in 2023. However, the measures the bank implemented to fight financial crime did not keep pace with this expansion.

In 2021, the FCA reviewed the financial crime controls of various challenger banks and identified significant concerns regarding Starling’s anti-money laundering and sanctions framework.

As a result of these findings, the FCA mandated that Starling restrict the opening of new accounts for high-risk customers until improvements were made. Despite this requirement, Starling opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.

BREAKING: Starling Bank, which has major operations in Cardiff, has been fined by The Financial Conduct Authority (FCA) for financial crime failings related to its financial sanctions screening. https://t.co/JO3XrgHld0 pic.twitter.com/bUTP8RSNCW

— Insider (@insiderwales) October 2, 2024

FCA Investigation Takes 14 Months

In January 2023, Starling discovered that its automated screening system had only screened customers against a small portion of the complete list of individuals subject to financial sanctions since 2017.

An internal review revealed systemic issues within its financial sanctions framework. Following this review, Starling reported multiple potential breaches of financial sanctions to the appropriate authorities.

Therese Chambers, FCA, Source: LinkedIn

Therese Chambers, FCA, Source: LinkedIn

“Starling’s financial sanction screening controls were shockingly lax. It left the financial system wide open to criminals and those subject to sanctions,” commented Therese Chambers, Joint Executive Director of Enforcement and Market Oversight.

“It compounded this by failing to properly comply with FCA requirements it had agreed to, which were put in place to lower the risk of Starling facilitating financial crime.”

The investigation into Starling’s practices took 14 months, significantly shorter than the average of 42 months for cases concluded in 2023/24. In response to these findings, Starling Bank has implemented programs to address the breaches and improve its overall financial crime control framework.

Tareq Sikder

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A Forex technical analyst and writer who has been engaged in financial writing for 12 years.

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The copy trading market is projected to double in size, growing from $2.2 billion to $4 billion by the end of this decade. In light of this, brokers and financial institutions are increasingly adopting PAMM, MAM, and Copy Trading solutions to scale operations and drive profitability. In this insightful webinar, Sergey Ryzhavin, Product Owner at B2COPY, outlines the advanced features of the B2COPY platform, showcasing how it enhances Copy Trading, PAMM, and MAM performance. Sergey also explores strategies for using these tools to attract new clients, improve customer engagement, and create additional revenue streams. 📣 Stay updated with the latest in finance and trading! Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/ 👍 Facebook: https://www.facebook.com/financemagnates/ 📸 Instagram: https://www.instagram.com/financemagnates_official 🐦 X (Twitter): https://twitter.com/financemagnates/ 📡 RSS Feed: https://www.financemagnates.com/feed/ ▶️ Telegram: https://t.me/financemagnatesnews Don’t miss out on our latest videos, interviews, and event coverage. 🔔 Subscribe to our YouTube channel for more!🔔

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    Relive the best moments from the Finance Magnates Pacific Summit 2024 with our highlights video! ✨ From action-packed moments, insightful speaker sessions, the exclusive Opening Blitz, and immersive workshops, this video captures the energy and excitement of FMPS:24. Whether you attended or missed out, here’s your chance to experience the top moments that made FMPS:24 unforgettable. 🎬 Watch, share, and join the conversation! Don’t forget to use the hashtags #fmps #fmps24 #FMevents when sharing. Stay tuned for more events. See you next time! 📣 Stay updated with the latest in finance and trading! Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/ 👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents 📸 Instagram: https://www.instagram.com/fmevents_official 🐦 Twitter: https://twitter.com/F_M_events 🎥 TikTok: https://www.tiktok.com/@fmevents_official ▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official Don’t miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!

    Relive the best moments from the Finance Magnates Pacific Summit 2024 with our highlights video! ✨ From action-packed moments, insightful speaker sessions, the exclusive Opening Blitz, and immersive workshops, this video captures the energy and excitement of FMPS:24. Whether you attended or missed out, here’s your chance to experience the top moments that made FMPS:24 unforgettable. 🎬 Watch, share, and join the conversation! Don’t forget to use the hashtags #fmps #fmps24 #FMevents when sharing. Stay tuned for more events. See you next time! 📣 Stay updated with the latest in finance and trading! Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/ 👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents 📸 Instagram: https://www.instagram.com/fmevents_official 🐦 Twitter: https://twitter.com/F_M_events 🎥 TikTok: https://www.tiktok.com/@fmevents_official ▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official Don’t miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!

    Relive the best moments from the Finance Magnates Pacific Summit 2024 with our highlights video! ✨ From action-packed moments, insightful speaker sessions, the exclusive Opening Blitz, and immersive workshops, this video captures the energy and excitement of FMPS:24. Whether you attended or missed out, here’s your chance to experience the top moments that made FMPS:24 unforgettable. 🎬 Watch, share, and join the conversation! Don’t forget to use the hashtags #fmps #fmps24 #FMevents when sharing. Stay tuned for more events. See you next time! 📣 Stay updated with the latest in finance and trading! Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today: 🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/ 👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents 📸 Instagram: https://www.instagram.com/fmevents_official 🐦 Twitter: https://twitter.com/F_M_events 🎥 TikTok: https://www.tiktok.com/@fmevents_official ▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official Don’t miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!

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