FCA Penalty on Starling Bank for Sanctions Failures

This document is a client alert detailing the Financial Conduct Authority's (FCA) imposition of a £29 million fine on Starling Bank Limited due to deficiencies in its financial crime systems and controls from December 2019 to November 2023. The FCA's review highlighted significant gaps in Starling's financial sanctions systems, including inadequate risk assessments, outdated policies, and insufficient management information. The alert outlines the bank's failure to comply with a voluntary requirement not to onboard higher-risk customers and emphasizes the need for firms to ensure their financial crime controls are commensurate with their growth and risk profiles. Starling's rapid growth, with its customer base expanding from 43,000 to over 3.6 million in seven years, exacerbated these issues. The document underscores the importance of effective sanctions screening and the need for firms to maintain robust compliance frameworks, particularly in light of the evolving regulatory landscape.