FCA Fines Starling Bank £29M for Financial Crime Failings

Hey FinTech Fanatic!

Starling Bank has been hit with a £28.9 million fine by the Financial Conduct Authority (FCA) for serious failings in its financial crime systems. Despite its explosive growth—surging from 43,000 customers in 2017 to 3.6 million in 2023—Starling’s controls on financial crime didn’t keep pace.

The bank repeatedly breached FCA requirements, including one that barred it from opening accounts for high-risk customers. Between 2021 and 2023, it opened over 54,000 such accounts, directly flouting an agreed restriction.

In January 2023, Starling discovered that its screening system had been insufficient since 2017, failing to check customers against full financial sanctions lists. An internal review exposed further flaws, leading to multiple reported breaches.

Therese Chambers, FCA Joint Executive Director of Enforcement, called Starling’s screening system “shockingly lax,” saying it left the financial system vulnerable to criminals and sanctions evaders.

Although the bank is now working to fix these issues, the FCA’s swift 14-month investigation—compared to an average of 42 months—signals a new era of faster regulatory enforcement.

The question is, how can banks strike the right balance between rapid growth and strong financial crime controls? Tell me your thoughts in the comments.

Now, onto the latest updates.

Cheers,

Marcel

INSIGHTS

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FINTECH NEWS

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PAYMENTS NEWS

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OPEN BANKING NEWS

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DIGITAL BANKING NEWS

🇬🇧 FCA Fines Starling Bank £29m for Failings in Their Financial Crime Systems and Controls. Starling repeatedly breached FCA requirements, including a restriction on opening high-risk accounts. In January 2023, it found its screening system had been faulty since 2017, failing to check customers against full sanctions lists. Find out more

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BLOCKCHAIN/CRYPTO NEWS

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🇭🇰 HK’s Bank of East Asia tests stablecoin issuance using UDPN. The UDPN is a multi-faceted project supporting the issuance of stablecoins and tokenized deposits, as well as providing an interoperability layer between different digital currencies, including central bank digital currencies (CBDCs).

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PARTNERSHIPS

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DONEDEAL FUNDING NEWS

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M&A

🇨🇭 Woolsocks AG has acquired loyalty app OK, expanding its financial ecosystem across Europe. This move enhances Woolsocks' financial super-app by integrating OK’s features, benefiting over 5 million users with improved savings tools and brand engagement, while providing retailers with advanced data insights for targeted marketing.

🇪🇺 Euronext Securities expands services with acquisition of Acupay. The acquisition of Acupay further expands Euronext Securities’ services offering to investors and issuers, the firm says, leveraging Acupay’s presence in Italy and opportunities to scale services through Euronext Securities’ network across Europe.

MOVERS & SHAKERS

🇸🇬 Singapore Gulf Bank (SGB), an upcoming digital bank, has appointed Ali AlShamma as Chief Financial Officer and Elaine Leong as Chief Operating Officer. These appointments come as SGB prepares to launch in November 2024. AlShamma brings extensive experience from his roles as CFO at Goldman Sachs Saudi Arabia and Citigroup Saudi Arabia, while Leong joins SGB from Sygnum and GIC.

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