Starling Bank confirms that it fully accepts the findings set out in the Final Notice published today by the Financial Conduct Authority (FCA).
This reportedly resolves the investigation referred to in Starling Bank’s annual report in June 2024.
Starling notes in a release that it “regrets” and “apologizes” for the events and shortcomings that led to the FCA’s Final Notice.
The Final Notice reportedly details failings that allegedly occurred at Starling between the dates of December 2019 to November 2023 in relation to the onboarding of certain “high-risk” clients as well as sanctions screening processes.
These failings had resulted in breaches of current Voluntary Requirements (VREQ) along with a breach of Principle 3 of the FCA’s Principles for Businesses.
The breaches of the VREQ were identified by Starling and “proactively” communicated to the FCA.
Starling claims that it has cooperated “fully” with the FCA in its investigation and accepts its finding that the Bank’s financial crime controls failed to keep pace with the growth of the firm’s business operations.
Starling has now paid a fine of £29 million as “full and final” settlement.
The Bank has completed a detailed re-screening of transactions as well as an “in-depth” back book review of customer accounts in respect of the “contraventions” detailed in the Notice.
In response to the FCA’s investigation, and as a result of the Bank’s continuous review of processes and controls, Starling explains that it has launched extensive additional safeguards to ensure the Bank complies with regulatory requirements.
Starling has increased capability, structure and resources across “all lines” of defense.
Improved controls in respect of the Bank’s monitoring and oversight of its compliance with the VREQ and in respect of its financial sanctions screening systems and controls are now in place.
Via investment into the Bank’s financial crime resource and expertise, Starling says that is now satisfied that it has the required compliance and risk management controls, procedures and policies in place.
David Sproul, Chairman of Starling Bank, said that he apologizes for the failings outlined by the FCA and to offer reassurance that they have invested heavily to put things right, including strengthening our board governance and capabilities.
David added that they want to assure our customers and employees that these are historic issues.
David also noted that they have learned the lessons of this investigation and are confident that these changes and the strength of their franchise put them in a position to continue executing their strategy of growth, supported by a risk management and control framework.
