Britain's Financial Conduct Authority said it had fined Santander £107.7m for "serious and persistent" gaps in the Spanish bank's anti-money laundering controls for more than 560,000 business customers.
The FCA said today that between December 31 2012 and October 18 2017, Santander's UK arm failed to properly oversee and manage its anti-money laundering systems.
The fine is the latest action by Britain's financial watchdog, as it tries to clamp down on poor internal controls by banks that allow illicit funds to flow through them.
Santander had ineffective systems to verify the information provided by customers about the business they would be doing, the FCA said.
"In one case, a new customer opened an account as a small translations business with expected monthly deposits of £5,000," Mark Steward, FCA executive director for enforcement, said in a statement.
Within six months, it was receiving millions in deposits, and swiftly transferring the money to separate accounts," he added.
Although the bank's anti-money laundering team had flagged the account for closure in March 2014, poor processes meant this was not acted on until September 2015, the FCA said.
Santander UK said it accepted the FCA's civil regulatory findings in relation to anti-money laundering controls in its business banking division.
The bank received a 30% discount to its fine for agreeing to settle, the FCA said.
The FCA investigation has concluded and no further action is anticipated by the UK watchdog or any other authority in respect of this matter, the bank said.
The FCA has stepped up action against failings in bank money laundering controls in recent years.
NatWest was fined £265m in December last year for failing to prevent the laundering of nearly £400m, in the first criminal money laundering case against a British bank.
The FCA has also fined Standard Chartered and HSBC in the last three years for anti-money laundering breaches.