FCA has fined Gatehouse Bank Plc for significant weakness in its financial crime systems and controls.

Gatehouse Bank has received a fine of £1,584,100 from the FCA for significant failings in its anti-money laundering systems and controls. The FCA investigation found that between June 2014 and July 2017, Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing. Gatehouse also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs).

This fine highlights the importance to companies of having the appropriate financial crime measures in place top properly conduct background checks on account holders and transactions. In the case of Gatehouse Bank, the bank did not require the account holder to collect information about customers’ source of funds or wealth. This was in contravention to the banks own anti-money laundering policies in place.

So how was this allowed to happen? It highlights a common problem in which the success of a policy is measured against the content in an insular compliance environment. The success of a policy is measured by the level of protection it affords the company and its customers. To reach this level, requires the active engagement of management structures in its implementation, subsequent monitoring and measurement. In the case of Gatehouse Bank, on the surface it would seem that the policy in place was not being effectively implemented, monitored and measured.