Nationwide Fined for Failing to Combat Financial Crime
Introduction to the Fine
Nationwide was fined £44 million for failing to do enough to combat financial crime. The Financial Supervisory Authority (FCA) imposed the penalty after criticizing the building society’s "inadequate" efforts to tackle crimes such as money laundering.
Details of the Failures
The regulator said this was included Nationwide having ineffective policies and procedures for monitoring personal checking accounts. The fine relates to failures between October 2016 and July 2021. The FCA said the building society missed an opportunity in a “serious” case to find out how a customer used current accounts to receive fraudulent COVID furlough payments worth millions of pounds during the pandemic.
Extent of the Fraud
They were sent 24 payments totaling £27.3m over a 13-month period, including £26m deposited within eight days. HMRC managed to reclaim most of the money, but around £800,000 has not yet been recovered. The FCA said Nationwide was aware that some customers were "using their personal accounts for business activities in breach of the regulations".
Response from the FCA
Therese Chambers, a director at the FCA, said: "Nationwide failed to properly manage the financial crime risks lurking within its customer base. It took too long to fix its faulty systems and weak controls, which meant warning signs were missed, with serious consequences." "Building societies and banks play a key role in the fight against financial crime. Businesses must remain vigilant in this fight."
Nationwide’s Response
A Nationwide spokesperson said: "Nationwide identified these issues, which relate to controls in place prior to July 2021, through its own reviews and voluntarily brought them to the FCA’s attention." “The company has cooperated fully with the FCA investigation and we are sorry that our controls during the reporting period fell short of the high standards we expect.” “Since 2021, Nationwide has invested significantly in all aspects of its economic crime framework to ensure our systems are robust.” They added: “We do not believe these control issues have caused any financial harm to any of our customers and remain committed to preventing financial crime and protecting our customers and the wider UK economy from fraud.”
Recent Fines for Financial Crime Failings
The penalty is the latest in a series of fines imposed by the FCA over financial crime failings in recent years. In December 2022, Santander UK was fined £107.8m for “repeated money laundering violations” and in November 2024, Metro Bank was fined £16 million for similar reasons.
