The UK Financial Conduct Authority (FCA) sanctioned Starling Bank on September 27, 2024, for systemic AML control failures, including inadequate due diligence, poor monitoring of high-risk clients, and a lack of governance over third-party intermediaries. The enforcement actions included fines totaling £29 million and public censures.

The FCA’s investigation revealed that the firms had outdated risk rating models, failed to screen customers adequately , and lacked sufficient escalation procedures for unusual activity. In some cases, offshore trusts and shell entities were used without adequate scrutiny, raising concerns over potential money laundering and tax evasion.

These cases serve as a reminder that even firms with relatively low transaction volumes are not exempt from robust AML obligations. The FCA has increased its supervisory focus on the wealth management sector, citing its exposure to cross-border transactions and private banking services as areas of high risk.

For compliance officers in the UK and beyond, the takeaway is clear: AML programs must evolve with the complexity of financial services offerings. This includes regular reviews of customer risk assessments, enhanced scrutiny of source-of-funds declarations, and thorough audits of intermediary relationships.

The FCA’s actions also stress the importance of board-level engagement in compliance strategy. Tone from the top is essential in building a culture of compliance that is proactive, rather than reactive.

Source: FCA fines Starling Bank £29m for failings in their financial crime systems and controls and the Final Notice for Starling Bank Limited
Image Source: https://www.esgtoday.com/wp-content/uploads/2025/03/FCA.jpg