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Starling has been around for more than a decade . But the FCA started pay attending to challenger depository financial institution with a wide - cast review of financial crime controls in 2021 .
The FCA most probably does n’t want to find itself in the same position as BaFin , the German financial governor . That ’s why we ’ve seen an increased level of examination on fintech startups in the U.K. and Europe over the past few long time .
Coming back to Starling ’s position , the FCA has identify shortcomings in its anti - money laundering processes .
The governor previously asked Starling to stop accept high - jeopardy customer until it fixed its anti - money laundering summons . However , around 49,000 high - risk customer managed to open Starling account statement between September 2021 and November 2023 .
Overall , 54,000 accounts were opened by high - risk client , per the FCA .
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It reports that Starling develop from 43,000 customers to 3.6 million in 2023 . On its site , the society now allege that it has 4.2 million customers .
“ Starling ’s financial sanction screening control were shockingly lax . It left the fiscal organisation widely open to criminals and those open to indorsement , ” Therese Chambers , FCA joint executive director of Enforcement and Market Oversight , say in apress releaseannouncing the warrant . “ It compounded this by failing to properly comply with FCA requisite it had agreed to , which were put in station to lower the risk of Starling ease financial crime . ”
Interestingly , Starling is join forces as the FCA says the amercement has been lowered by 30 % . The company agreed to fix its processes so that it could pay off a lower fine and move on .
“ I would care to apologize for the failing outline by the FCA and to supply reassurance that we have endue intemperately to put thing right , including strengthening our board governance and capabilities , ” Starling president David Sproul say in a statement .
“ We want to assure our customers and employees that these are historic issues . We have learned the lessons of this investigation and are surefooted that these change and the military posture of our enfranchisement put us in a strong position to continue executing our strategy of secure , sustainable growth , endorse by a racy risk management and control model , ” he add .
Now , you might be wondering what ’s go on atotherchallenger banks . Monzo , for example , has also faced regulative probe in recent years . But after two years of digging , the FCAdroppedits vicious probe .
As for Revolut , the FCA flagged some suspicious account in 2023 , according to theFinancial Times . At the time , the startup was an east - money institution , not a bank . But the governor went on to grant it a U.K. banking license inJuly 2024 , after a long diligence process .
