Santander has terminated the consulting firm EY in the United Kingdom after noticing flaws in its work to prevent financial crimes and money laundering. The ‘Big Four’ are among the advisers Santander has turned to to strengthen its systems following pressure from Britain’s banking supervisor, which is increasingly focusing on preventing financial crimes.
According to the Financial Times, the work done by EY was so poor that the professional services company was even forced this year to offer the bank a refund of about 15 million pounds for the project (17 million euros per year). The work, known as Project Morgan, “was badly damaged over a long period” and the deal affected the results of the consultancy firm’s UK financial services division.
At the end of 2022, Santander agreed to a fine of 125 million euros in the United Kingdom after the supervisor noted “deficiencies” in its protocols to prevent money laundering. The Financial Conduct Authority (FCA) concluded that Santander UK failed to adequately monitor and manage its systems, which “significantly” affected the management of accounts for more than 560,000 business customers. For this reason, the bank intends to strengthen these control systems.
The penalty refers to an investigation that started from 2012 to 2017 and that coincided with the years in which Santander UK was in the process of integrating the banks it bought in the United Kingdom in the midst of the financial crisis: Alliance & Leicester and Bradford and Bingley. . Likewise, the bank added that in recent years it has invested £ 700 million in a program to change the framework in which it manages financial crime in the United Kingdom.
“We have made significant changes to our technology, systems and processes to transform our prevention framework. Today, more than 4,400 professionals are dedicated to preventing financial crimes. “We will continue to invest in the future and will do everything in our power to ensure the safety of all our customers and the communities in which we operate,” Santander UK CEO Mike Regnier explained at the time.
On the part of EY, the failure of the Morgan Project was accompanied by a process of cutting the personnel of the financial crimes advisory team in the United Kingdom. Several of the members of this division, which consists of about 150 people, are about to be laid off. According to several sources who spoke to the Financial Times, the Santander case did not drive these dismissals, but it was a wider process. Also, the company remembers that the end of the contract continues to work with Santander in other countries around the world for many issues.