RBS fined 5.6 million GDP
(5 August 2010−Britian) The Financial Services Authority (FSA) has fined the Royal Bank of Scotland £5.6 million for IT system failures that potentially could have lead to terrorist financing.
It was alleged that the bank did not have adequate systems and controls in place to prevent breaches of UK financial sanctions between 15 December 2007 and 31 December 2008 at its RBS, NatWest, Ulster Bank and Coutts units.
The watchdog said that the bank failed to screen customers and the payments they made and received against the governments Treasury sanctions.
The bank allegedly didn’t screen any payments remitted from outside the UK over a year long period.
Around 14,000 payments messages valued at £2.5 billion were manually entered into the bank’s gateway application for Swift messages, therefore bypassing screening software.
The group’s technology was also of concern, only screening 47 swift trade finance message types.
The bank’s 'fuzzy matching' software, which is supposed to help identify words within payments messages that are mis-spelt or inaccurately translated, was affected due to the bank only calibrating their machine once and not adhering to design rules.
Margaret Cole, director, enforcement and financial crime, FSA, said after the ruling that by failing to screen relevant customers and payments against the HM Treasury sanctions list, RBS left itself open to the risk that it was facilitating terrorist financing.
Nathan Bostock, head, restructuring and risk, RBS says the bank acknowledges the FSA findings and has taken appropriate action to remedy these issues and continue to enhance our control environment with a view to ensuring a more robust sanctions compliance framework and ultimately that our detection and prevention capabilities are in line with best practice in the market.
The watchdog said that the bank failed to screen customers and the payments they made and received against the governments Treasury sanctions.
The bank allegedly didn’t screen any payments remitted from outside the UK over a year long period.
Around 14,000 payments messages valued at £2.5 billion were manually entered into the bank’s gateway application for Swift messages, therefore bypassing screening software.
The group’s technology was also of concern, only screening 47 swift trade finance message types.
The bank’s 'fuzzy matching' software, which is supposed to help identify words within payments messages that are mis-spelt or inaccurately translated, was affected due to the bank only calibrating their machine once and not adhering to design rules.
Margaret Cole, director, enforcement and financial crime, FSA, said after the ruling that by failing to screen relevant customers and payments against the HM Treasury sanctions list, RBS left itself open to the risk that it was facilitating terrorist financing.
Nathan Bostock, head, restructuring and risk, RBS says the bank acknowledges the FSA findings and has taken appropriate action to remedy these issues and continue to enhance our control environment with a view to ensuring a more robust sanctions compliance framework and ultimately that our detection and prevention capabilities are in line with best practice in the market.
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