Britain's financial watchdog has fined Nationwide Building Society £44m for failing to properly monitor financial crime risks among its customers between October 2016 and July 2021.
Nationwide, Britain's second-biggest mortgage lender, had ineffective systems for monitoring personal account customers and was aware some of them were using such accounts for business purposes, breaching its own terms, the FCA said today.
The customer-owned lender did not offer business accounts during the period in question and therefore did not have the right controls to manage associated money laundering risks, the FCA added.
Nationwide had itself identified the issues and brought them to the attention of the regulator, a spokesperson for the lender said.
"We do not believe that these controls issues caused financial loss to any of our customers and remain committed to preventing economic crime and protecting our customers and the wider UK economy from fraud," the spokesperson said.
In one case that the FCA described as serious, Nationwide missed opportunities to identify a customer using a personal account to receive £27m in fraudulent payments from Britain's Covid-19-related furlough scheme.
"Nationwide failed to get a proper grip of the financial crime risks lurking within its customer base. It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences," said Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
