NatWest Pleads Guilty to AML System Fails

NatWest has pleaded guilty to three money laundering offences in relation to the accounts of a UK incorporated customer.

Today (7 October), the bank announced that it had failed to meet the regulations required to determine and conduct risk sensitive ongoing monitoring of its customers for anti-money laundering (AML) purposes.

The offences relate to issues between 2012 and 2016 – and deposits of £365 million. They included weaknesses in some of the bank’s automated systems as well as certain shortcomings in adherence to monitoring and investigations procedures.

NatWest has cooperated with the Financial Conduct Authority (FCA) since its investigation began. The FCA has confirmed it will not take action against any individual current or former employee of NatWest.

The case has been remitted to the Crown Court for sentencing which will be determined at a subsequent hearing, expected to be in four to eight weeks’ time. A provision will be made in NatWest’s Q3 2021 financial accounts in anticipation of a potential fine being imposed at that hearing.

NatWest CEO, Alison Rose, expressed “regret” over the issue but also pointed out the investments by the bank concerning AML matters.

The bank says it has invested almost £700 million in the last five years including upgrades to transaction monitoring systems, automated customer screening and new customer due diligence solutions.

NatWest currently has more than 5,000 staff in specialist financial crime roles, dedicated to detecting and preventing financial crime under the leadership and focus of a centralised bank-wide ‘FinCrime Hub’.

The bank says its financial plans already include over £1 billion to further strengthen financial crime controls over the next five years.

The UK state owns around 54.7% of NatWest after spending £45 billion to bail out the lender in the financial crisis of 2008.

Last year, Royal Bank of Scotland (RBS) changed its parent company name to NatWest Group. RBS was founded in 1727. However, 80% of its customer base in 2020 fell within the NatWest part.

At that time, commentary on social media was a mixed bag. Some people saw the name change as “Anglicisation”, while others a bid to remove the “toxic” past when NatWest/RBS was bailed out.

Image courtesy of NatWest.

Antony Peyton
Antony Peyton is the Editor of eWeek UK. He has 17 years' journalism and writing experience. His career has taken him to China, Japan and the UK - covering tech, fintech and business. Follow on Twitter @TonyFintech.

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