Lessons from Santander’s fines

Santander has been fined a total of £32.8m by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), for failing to properly monitor transactions and identify suspicious activity.

The FCA found that Santander had inadequate systems and controls in place to prevent money laundering, and the PRA identified “significant shortcomings” in the bank’s management of its anti-money laundering (AML) processes. This is not the first time that Santander has been penalised for money laundering failings; in 2018, the bank was fined £32m by the FCA for similar issues.

The latest fine is a warning that financial institutions must have more efficient due diligence and transaction monitoring procedures in place. The issues in large part stemmed from constraints on resourcing meaning that high risk alerts were not reviewed for a long time, and that business banking alerts were all classified as medium risk.

Existing tools and technology historically haven’t been strong enough to fight fraud – solutions that depend on data sets can help with tick-box compliance and yes/no answers, but they don’t provide any wider insight about potential customers.

Finding this information out requires teams of manual investigators to research across open source information and corporate records, along with PEPs, Sanctions and Watchlist checks. This includes screening out millions of false positives for ineffective flagging systems. Doing this research has historically been hugely time consuming.

Xapien is a rapid, automated solution that produces detailed, fully-sourced and auditable background reports on individuals and organisations, in minutes. This means that prioritising high- and medium-risk transactions will not be a burden on manual teams, and potential risks can be spotted earlier.

It also enables in depth reviews of customer’s wider profiles to be conducted in minutes, not days, massively cutting down backlogs and delays in regulatory reporting.

Our platform enables everyone to know who they are doing business with, in just a few minutes. Organisations across sectors can focus on doing business with the right clients, safe in the knowledge that they are protecting their organisation from the financial, regulatory, legal and reputational risks incurred by associating with the wrong ones.