Starling Bank response to FCA Final Notice

LONDON, 2 October 2024: Starling Bank (“Starling” or the “Bank”) confirms that it fully accepts the findings set out in the Final Notice published today by the Financial Conduct Authority (“FCA”). This resolves the investigation referred to in the Bank’s annual report in June 2024. Starling regrets and apologises for the events and shortcomings that led to the FCA’s Final Notice.

The Final Notice details failings that occurred at Starling between December 2019 and November 2023 in relation to the onboarding of certain high-risk customers and sanctions screening processes. These failings resulted in breaches of existing Voluntary Requirements (“VREQ”) and a breach of Principle 3 of the FCA’s Principles for Businesses.

The breaches of the VREQ were identified by Starling and proactively communicated to the FCA. Starling has cooperated fully with the FCA in its investigation and accepts its finding that the Bank’s financial crime controls failed to keep pace with the growth of the business. Starling has paid a fine of £29m as full and final settlement.

The Bank has completed both a detailed re-screening of transactions and an in-depth back book review of customer accounts in respect of the contraventions detailed in the Notice.

In response to the FCA’s investigation, and as a result of the Bank’s continuous review of processes and controls, Starling has introduced extensive additional safeguards to ensure the Bank complies with regulatory requirements. Starling has significantly increased capability, structure and resources across all lines of defence. Enhanced controls in respect of the Bank’s monitoring and oversight of its compliance with the VREQ and in respect of its financial sanctions screening systems and controls are now in place.

Through extensive investment into the Bank’s financial crime resource and expertise, Starling is satisfied that it has the required compliance and risk management controls, procedures and policies in place.

David Sproul, Chairman of Starling Bank, said: “I would like to apologise for the failings outlined by the FCA and to provide reassurance that we have invested heavily to put things right, including strengthening our board governance and capabilities. We want to assure our customers and employees that these are historic issues. We have learned the lessons of this investigation and are confident that these changes and the strength of our franchise put us in a strong position to continue executing our strategy of safe, sustainable growth, supported by a robust risk management and control framework.”