The FCA has fined Nationwide Building Society £44m for inadequate financial crime controls.
The UK regulator said the building society had poor anti-financial crime systems and controls between October 2016 and July 2021, which were ineffective in monitoring its personal current account customers’ transactions.
Nationwide customers were also breaking the rules by using their personal accounts for business activity, which the building society was aware of but did not act upon, and did not having the right processes in place to manage the financial crime risks from business activity.
This meant Nationwide was unable to effectively identify, assess, monitor or manage the money laundering risks among its personal current account customers.
The FCA flagged a case where Nationwide missed opportunities to identify a customer using personal current accounts to receive fraudulent Covid furlough payments. The customer received 24 payments totalling £27.3m over 13 months, with £26m of this deposited over 8 days. HMRC recovered £26.5m, but approximately £800,000 remains unrecovered.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: ”Nationwide failed to get a proper grip of the financial crime risks lurking within its customer base. It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences.
“Building societies and banks have a key role in the fight against financial crime. Firms must remain vigilant in this fight.”
Nationwide subsequently implemented a financial crime transformation programme in July 2021.
