Nationwide fined £44m by FCA for financial crime control failures
The Financial Conduct Authority (FCA) has fined Nationwide £44 million for weak financial crime controls that spanned from October 2016 to July 2021. These control failures contributed to a Covid furlough fraud case involving 24 payments totalling £27.3 million over 13 months, with about £26 million deposited in just eight days.
Nationwide was aware that some customers used personal accounts for business activity due to the bank not offering business accounts at the time, but it lacked adequate monitoring processes to detect such risks. HMRC has recovered £26.5 million from the fraudsters, leaving approximately £800,000 unrecovered, resulting in a loss to UK taxpayers.
The bank identified the issues through its own reviews, voluntarily disclosed them to the FCA, and cooperated fully with the regulator. Since 2021, Nationwide has made substantial investments in economic crime controls and launched a large-scale transformation programme in July 2021.
FCA enforcement director Therese Chambers said Nationwide failed to grasp financial crime risks and missed red flags, emphasizing the need for continued vigilance by banks and building societies. Nationwide apologised for its controls falling below the expected high standards, reaffirmed that no customers suffered losses, and committed to preventing economic crime in the future.
