Metro Bank · Governance finding · severity 3 of 5
On 12 November 2024 the FCA fined Metro Bank £16,675,200 because the automated transaction-monitoring system it introduced in June 2016 failed to monitor more than 60 million transactions worth over £51bn until December 2020. Per the FCA, an error in how data was fed into the system meant transactions made on the day an account was opened, and later ones until the account record was updated, were never checked for money-laundering risk. Junior staff raised concerns in 2017 and 2018 without the issue being fixed; a fix came in July 2019, but completeness checks only in December 2020. A later lookback review led to 153 suspicious activity reports. Metro accepted the findings. The system was automated and not described as AI.
Record last reviewed Oct 21, 2026 · Markdown
Date
Institution
Metro Bank
Country
United Kingdom
AI system
Automated Transaction Monitoring System (ATMS) · Automated anti-money-laundering transaction-monitoring system fed from an internal data store; not described as AI
AI?
Automated system not described as AI
The system was automated, but neither the institution nor a regulator described it as AI; it is listed because it is routinely discussed as an AI failure.
Category
Status
Regulator finding
Severity
3 of 5
Impact
£16,675,200 FCA fine (£23,821,700 before the settlement discount) · More than 60 million transactions worth over £51bn were not monitored for money-laundering risk between June 2016 and December 2020; no customer losses were reported. · The lookback review led to 153 additional suspicious activity reports and 43 account closures.
What happened?
On 6 June 2016 Metro Bank implemented an Automated Transaction Monitoring System (ATMS) to monitor customer transactions for money-laundering risk. Data reached the ATMS from a separate internal Data Store. Per the FCA's Final Notice, an error in the data-extraction methodology meant that where a customer opened an account and transacted on the same day, the account record was not included in the feed, so the ATMS rejected those transactions and all later ones until the account record was updated.[1][2]
Metro found the problem, which the FCA calls the Time Stamp Code Logic Error, on 17 April 2019 while testing an upgrade to its core banking system, and told the FCA on 29 May 2019. By then it had affected about 166,000 accounts and more than 46.5 million transactions worth over £31.5bn. Records rejected for other data-quality reasons ('Bad Data') were placed in folders that were only intermittently reviewed. In total, over 60 million transactions (about 6% of volume) worth more than £51bn (about 7.6% of value) were not monitored between June 2016 and December 2020.[1][3]
The FCA said junior staff raised concerns about unmonitored data in 2017 and 2018, and the issue reached Metro's Financial Crime Steering Group in January 2018, but the decision to review it was removed from the meeting's final minutes and no substantive action followed. A tactical fix went in on 21 July 2019, but Metro had no way to check that all relevant records were reaching the ATMS until it introduced daily reconciliation 'count files' on 17 December 2020.[1][2][4]
A lookback review of the unmonitored transactions, completed in 2022, led Metro to file 153 suspicious activity reports and close 43 customer accounts, in addition to 1,403 reports already filed on customers in the review. The FCA found Metro breached Principle 3 (management and control).[1][4]
When did it happen?
- Jun 6, 2016
Metro Bank implements its Automated Transaction Monitoring System; a data-feed error means same-day transactions on new accounts are not monitored.[1]
- Jan 2018
Unmonitored 'Bad Data' is raised at Metro's Financial Crime Steering Group; the agreed review is removed from the final minutes.[1]
- Apr 17, 2019
Metro identifies the data-feed error during testing of a core banking upgrade and notifies the FCA on 29 May 2019.[1][2]
- Jul 21, 2019
A tactical fix is applied to the data feed.[1]
- Dec 17, 2020
Metro starts daily reconciliation of records sent to and received by the ATMS, ending the period the FCA examined.[1]
- Nov 12, 2024
The FCA fines Metro Bank £16,675,200 after a 30% settlement discount; Metro accepts the findings.[2][3]
What was the impact?
- Financial: £16,675,200 FCA fine (£23,821,700 before the settlement discount)[1][2][4]
- Customers: More than 60 million transactions worth over £51bn were not monitored for money-laundering risk between June 2016 and December 2020; no customer losses were reported.[1][2][4]
- Other: The lookback review led to 153 additional suspicious activity reports and 43 account closures.[1][2][4]
Severity 3 of 5: A regulatory finding with a £16,675,200 fine (below the $25m band) for a monitoring gap that lasted four and a half years and left more than 60 million transactions worth over £51bn unmonitored; no customer losses were reported.
How did Metro Bank respond?
Metro said it accepted the FCA's findings, had co-operated fully, and had resolved the transaction-monitoring system failings and enhanced its processes. Chief executive Daniel Frumkin said: "The conclusion of these inquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid."[3][4]
What was the outcome, and did regulators act?
The FCA found a breach of Principle 3 and fined Metro Bank £16,675,200; Metro settled and received a 30% discount. The FCA said that since identifying the issues in April 2019 Metro had put processes in place to remediate them, and the Final Notice says Metro made significant enhancements to its data architecture and controls after two external compliance reviews.[1][2]
Why was Metro Bank fined £16.7m?
The FCA fined Metro Bank £16,675,200 in November 2024 because its automated transaction-monitoring system failed to check more than 60 million transactions worth over £51bn for money-laundering risk between June 2016 and December 2020, after a data-feed error and poor handling of rejected records.
Was Metro Bank's transaction monitoring system AI?
No. The FCA describes an Automated Transaction Monitoring System whose failure came from how data was extracted and fed into it, not from a model's decisions. Neither the FCA nor Metro described it as artificial intelligence; it is recorded here as an automated-system failure for comparison with similar cases.
Was any money lost because of Metro Bank's monitoring gap?
No customer losses have been reported. A lookback review of the unmonitored transactions, completed in 2022, led Metro to file 153 suspicious activity reports and close 43 accounts. The FCA did not quantify any money laundered through the unmonitored transactions.
What did Metro Bank change after the FCA investigation?
Metro applied a fix to the data feed in July 2019, started daily reconciliation count files in December 2020 to confirm every record reached the monitoring system, removed internal transactions from the feed, and made enhancements to its data architecture and controls after two external compliance reviews.
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