Welcome back to the Banking Risk & Regulation newsletter.

In today’s news:

⛔ Santander battles fresh FCA probe over AML failings 

🎥 How does Labour propose to shake up the FCA? 

🦥 Fear of change and legacy tech stalling UK bank innovation

Santander UK has been investigated once again for financial crime failures, after years of being “peppered” with similar probes by the financial supervisor, reports Ellesheva Kissin in a Banking Risk & Regulation exclusive.

The UK’s Financial Conduct Authority recently wound up a section 166 probe earlier this quarter, after placing an external skilled person inside Santander to review the bank’s anti-money laundering systems. 

This isn’t the first time it’s happened. One person that worked on previous probes into the bank’s systems said they were aware of “at least three” such probes since 2015.

The FCA even fined Santander almost £108mn in 2022 for repeated AML failings between 2012 and 2017. A spokesperson for the bank said it is committed to strengthening its “control environment” and aligning with “best practice”.

Santander is now working its way through a list of corrective actions prescribed by the FCA, but the ongoing investigations have created something of a problem: a “revolving door of senior compliance staff” at the bank, sources claim.

The FCA is potentially facing “corrective action”, should Labour seize power at next Thursday’s UK general election. After 14 years on the sidelines, pollsters predict a slam-dunk win for Labour, whose plans for the City include reforming the FCA.

Take a few minutes to sit back and watch my explainer video on how Labour would shake up the supervisor, starting with a review of its huge rulebook and the creation of a new Regulatory Innovation Office.

In case you missed it, a damning new survey from banking tech platform SaaScada finds that fear of change is blocking innovation at UK retail and business banks. Three out of four heads of product innovation said that banks need to modernise, but challenging groupthink puts careers at risk. John Crowley brings you the figures and analysis.

Stay tuned for tomorrow’s newsletter.

Please tell us what you’d like to read more of and what content would be most useful to you. You can contact me directly at farah.khalique@ft.com.

Podcast

Drama at the FCA: can it survive?

Editor Farah Khalique discusses scrutiny of the UK’s financial services regulator and calls for reform with The Banker’s deputy editor, Liz Lumley.

Originally produced by The Banker

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