Nationwide Building Society is facing a £44 million fine due to inadequate crime controls. The Financial Conduct Authority (FCA) highlighted serious shortcomings in monitoring financial crime risks tied to customer accounts.
Key Findings of the FCA Investigation
The FCA’s investigation revealed that Nationwide was aware that some personal accounts were being misused for business purposes. Despite this knowledge, the organization failed to effectively monitor these accounts for money laundering risks.
- Duration of Concern: The FCA scrutinized a 13-month period.
- Illegitimate Payments: A customer involved in fraudulent activity received £27.3 million.
- Government Support: A total of £64 million in Job Retention Scheme (JRS) funds was deposited into over 5,000 personal accounts.
Regulatory Response
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, criticized the society’s handling of financial crime risks. “Nationwide failed to get a proper grip on the financial crime risks lurking within its customer base,” she stated. “It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences.”
Nationwide’s Acknowledgment and Commitment
In response to the findings, a Nationwide spokesperson expressed regret. “We are sorry that our controls during the period fell below the high standards we expect,” they said. The society noted that it identified the issues through its internal reviews and communicated these to the FCA.
- Investments: Since 2021, Nationwide has invested significantly in enhancing its economic crime control framework.
- Commitment to Improvement: The organization is dedicated to preventing economic crime and protecting customers and the UK economy.
Despite the regulatory actions, Nationwide believes that the issues it faced did not result in financial losses for customers. The building society continues to work on improving its systems to ensure better compliance in the future.
