Repeat customer due diligence failings earn Barclays £42m fine

The bank opened a client money account for a firm without checking the Financial Services Register and rated another customer 'low risk' despite its receipt of tens of millions from a company under criminal investigation. Denis O'Connor scrutinises lessons to be learned.

Denis O'Connor is a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers' Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group's board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

Two members of the Barclays Group have been fined £42 million in total by the Financial Conduct Authority for failings in their customer due diligence (CDD) on two separate clients. Barclays Bank UK plc was penalised £3m for failing to check whether it had sufficient information to understand the money laundering risks before opening a client money account for a fund manager, WealthTek [1]. In the second case, Barclays Bank plc was fined £39m for not properly managing the money laundering risks linked to a business customer, Stunt & Co [2].