For five years from 2016, Nationwide had ineffective systems for keeping up-to-date due diligence and risk assessments for all its personal current account customers and for monitoring their transactions. The building society was also aware that some of those customers were using their personal accounts for business activity, in breach of its terms, says the FCA. The firm did not offer business current accounts at this point, so did not have the right processes in place to manage the financial crime risks from business activity. This meant Nationwide was unable to effectively identify, assess, monitor or manage the money laundering risks among its personal current account customers. It also meant Nationwide did not have an accurate picture of its customers who presented a higher risk of financial crime.In one instance, the weak controls saw Nationwide fail to spot a customer using personal current accounts to receive 24 payments fraudulent Covid furlough payments totalling £27.3 million. While HM Revenue & Customs managed to recover the vast majority of the money, £800,000 remains unrecovered.Therese Chambers, joint executive director, enforcement and market oversight, FCA, says: "Nationwide failed to get a proper grip of the financial crime risks lurking within its customer base. It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences."
By on 2025-12-12 08:00:00
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