FCA fines Starling Bank £29m for failures in financial sanction checking

With the Authority describing Starling’s financial sanction screening controls as ‘shockingly lax’ this should act as a wake-up call to others in the financial sector

Starling Bank has been fined £29m for failings in financial crime systems, which saw the bank open 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023. This shocking figure comes at a time when sanctions are at their most extensive and being policed more closely than ever.

Against this backdrop of an increasingly complex sanctions landscape, banks are being asked to keep constantly up-to-speed with changing sanctions lists. It is also clear with this action that the FCA is policing and enforcing the sanctions stringently and so the huge fine facing Starling should act as a wake-up call to others in the financial sector.

However, the very nature of financial sanctions means that it is an ever-changing beast, which makes it extremely challenging for companies to ensure that they are adhering to the latest lists as Stuart Favier, Insurance Client Manager at Northdoor plc explains:

“This is a huge fine and one that exemplifies just how seriously the Government and the FCA are enforcing adherence to the financial sanctions process. In the immediate aftermath of the Russian invasion of Ukraine, there was a huge effort from most in the financial sector to check their accounts and close any that were sanctioned due to being aligned with the Russian regime. However, over the years, there has been some relaxation as the focus has turned away from sanctions.