The Financial Conduct Authority (FCA) has fined Al Rayan Bank £4.02m for failing to put in place adequate anti-money laundering (AML) controls.

This is the second fine this week issued by the regulator for AML failings, following the £7.7m fine handed to Guaranty Trust Bank yesterday.

An FCA investigation found that between April 2015 and November 2017, Al Rayan allowed money to pass through the bank, and be used within the UK without carrying out appropriate checks. According to the regulator, the firm failed to adequately check its customers’ source of funds when it was required to make sure the money was not connected to financial crime.

These failings were made worse by the lack of proper training provided to staff about how to handle large deposits, which further heightened the risk of money laundering and financial crime.

Al Rayan was aware of these weaknesses but failed to implement effective changes to fix them, the FCA stated, despite the regulator raising concerns about the inadequacies of its systems.

Executive director of enforcement and market oversight at the FCA, Mark Steward, commented: “Al Rayan failed to manage the risk that it might be used to facilitate money laundering.

“These failings create the conditions in which financial crime is facilitated and can take root within a firm. While the risk was caught in time, the failings here were egregious.
 
“The FCA will continue to raise the stakes for firms that do not take their financial crime responsibilities seriously, especially in preventing money laundering risks which harms confidence and integrity in our market and in preventing financial crime, which is a key component in the FCA’s three-year strategy.”

In response to the FCA action, CEO at Al Rayan Bank, Giles Cunningham, said that while the regulator had identified “historic weaknesses” in the bank’s financial crime systems and controls, it had not found any evidence of money laundering or other criminal activity by the bank.

“None of the bank’s existing management were in a senior management function at the time,” Cunningham added. “The bank cooperated fully throughout, and all identified weaknesses have been fully resolved with the support and assistance of external, independent subject matter experts.
 
“The financial penalty will have no material impact. The bank remains well capitalised and will report very strong financial results for 2022.
 
“Maintaining strong defences against the evolving threats of financial crime is an essential part of our business plan and is being led by the new board and executive team.”

Share Story: