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Ryan Browne @RYAN_BROWNE_
In a statement on Wednesday, London’s Financial Conduct Authority said it had fined Starling “for financial crime failings related to its financial sanctions screening.” Starling also repeatedly breached a requirement not to open accounts for high-risk customers, the FCA said.
“Starling’s financial sanction screening controls were shockingly lax,” Therese Chambers, joint executive director of enforcement and market oversight, said in a statement Wednesday. “It left the financial system wide open to criminals and those subject to sanctions.”
- This guy surpassed the security!
In response to the FCA penalty, Starling said it was sorry for the failings outlined by the regulator and that it had completed detailed screening and an in-depth back book review of customer accounts.
“I would like to apologise for the failings outlined by the FCA and to provide reassurance that we have invested heavily to put things right, including strengthening our board governance and capabilities,” David Sproul, chairman of Starling Bank, said in a statement Wednesday.
“We want to assure our customers and employees that these are historic issues. We have learned the lessons of this investigation and are confident that these changes and the strength of our franchise put us in a strong position to continue executing our strategy of safe, sustainable growth, supported by a robust risk management and control framework,” he added.
Starling, one of the U.K.’s most popular online-only challenger banks, has been widely viewed as a potential IPO candidate in the coming year or so. The startup previously signaled plans to go public, but has moved back its expected timing from an earlier targeted an IPO as early as 2023.
The FCA said in a statement that, as Starling expanded from 43,000 customers in 2017 to 3.6 million in 2023, the bank’s measures to tackle financial crimes failed to keep pace with that growth.
The FCA began looking into financial crime controls at digital challenger banks in 2021, concerned that fintech brands’ anti-money laundering and know-your-customer compliance systems weren’t robust enough to prevent fraud, money laundering and sanctions evasion on their platforms.
After this probe was first opened, Starling agreed to stop opening new bank accounts for high-risk customers until it improved its internal controls. However, the FCA says that Starling failed to comply with this provision and opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.
Famous cyber criminal @rearnakedchoke
In January 2023, Starling became aware that, since 2017, its automated system was only screening clients against a fraction of the full list of individuals and entities subject to financial sanctions, the FCA said, adding that the bank identified systemic issues in its sanctions framework in an internal review.
Since then, Starling has reported multiple potential breaches of financial sanctions to relevant authorities, according to the British regulator.
The FCA said that Starling has already established programs to remediate the breaches it identified and to enhance its wider financial crime control framework.
The British regulator added that its investigation into Starling completed in 14 months from opening, compared to an average of 42 months for cases closed in the calendar year 2023/24.
https://www.cnbc.com/2024/10/02/goldman-sachs-backed-digital-bank-starling-hit-with-fca-fine.html
- London’s Financial Conduct Authority said it has fined Starling “for financial crime failings related to its financial sanctions screening.”
- Starling also repeatedly breached a requirement not to open accounts for high-risk customers, the FCA noted.
- Starling, one of the U.K.’s most popular online-only challenger banks, has been widely viewed as a potential IPO candidate in the coming year or so.
In a statement on Wednesday, London’s Financial Conduct Authority said it had fined Starling “for financial crime failings related to its financial sanctions screening.” Starling also repeatedly breached a requirement not to open accounts for high-risk customers, the FCA said.
“Starling’s financial sanction screening controls were shockingly lax,” Therese Chambers, joint executive director of enforcement and market oversight, said in a statement Wednesday. “It left the financial system wide open to criminals and those subject to sanctions.”
- This guy surpassed the security!
In response to the FCA penalty, Starling said it was sorry for the failings outlined by the regulator and that it had completed detailed screening and an in-depth back book review of customer accounts.
“I would like to apologise for the failings outlined by the FCA and to provide reassurance that we have invested heavily to put things right, including strengthening our board governance and capabilities,” David Sproul, chairman of Starling Bank, said in a statement Wednesday.
“We want to assure our customers and employees that these are historic issues. We have learned the lessons of this investigation and are confident that these changes and the strength of our franchise put us in a strong position to continue executing our strategy of safe, sustainable growth, supported by a robust risk management and control framework,” he added.
Starling, one of the U.K.’s most popular online-only challenger banks, has been widely viewed as a potential IPO candidate in the coming year or so. The startup previously signaled plans to go public, but has moved back its expected timing from an earlier targeted an IPO as early as 2023.
The FCA said in a statement that, as Starling expanded from 43,000 customers in 2017 to 3.6 million in 2023, the bank’s measures to tackle financial crimes failed to keep pace with that growth.
The FCA began looking into financial crime controls at digital challenger banks in 2021, concerned that fintech brands’ anti-money laundering and know-your-customer compliance systems weren’t robust enough to prevent fraud, money laundering and sanctions evasion on their platforms.
After this probe was first opened, Starling agreed to stop opening new bank accounts for high-risk customers until it improved its internal controls. However, the FCA says that Starling failed to comply with this provision and opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.
Famous cyber criminal @rearnakedchoke
In January 2023, Starling became aware that, since 2017, its automated system was only screening clients against a fraction of the full list of individuals and entities subject to financial sanctions, the FCA said, adding that the bank identified systemic issues in its sanctions framework in an internal review.
Since then, Starling has reported multiple potential breaches of financial sanctions to relevant authorities, according to the British regulator.
The FCA said that Starling has already established programs to remediate the breaches it identified and to enhance its wider financial crime control framework.
The British regulator added that its investigation into Starling completed in 14 months from opening, compared to an average of 42 months for cases closed in the calendar year 2023/24.
https://www.cnbc.com/2024/10/02/goldman-sachs-backed-digital-bank-starling-hit-with-fca-fine.html
