Rahman Ravelli explains challenger banks’ compliance problems

Rahman Ravelli was asked about Metro Bank being fined more than £16.6 million for money laundering failings and the problems facing such challenger banks.

They told Law360 that "the fine tells its own story’’ and called it “an ignominious chapter in the tale of what was the first high street bank to open in over a century,"

Rahman Ravelli added: "A bank with millions of customers can expect little in the way of leniency when it has failed to act for years on concerns raised by its junior staff."

City AM asked Rahman Ravelli what the Metro fine and a £28.9 million penalty imposed on Starling Bank last month for sanctions failings said about challenger banks.

Rahman Ravelli explained that with both banks “a rapid rise has been followed by a spectacular penalty for blatant failings when it comes to financial controls.’’

They added: “Both cases are a sharp reminder of what can be expected if a bank’s screening processes do not keep up with its growth and it does not have a monitoring system that acts decisively on any red flags.

“If the eye-catching challenger banks were enjoying a honeymoon period of speedy growth and admiration from certain quarters, it would appear to be over now.

“The authorities were never likely to take an overly-romantic view of the new kids on the block. And, as has been shown, any failings are bound to lead to less than harmonious relations. More needs to be done if they are to continue to thrive without attracting further penalties.”

The full articles can be read here (Law360 - subscription required) and here (City AM).

Featured at: City AM