RBS’s expensive failure to adequately screen its clients
In what has become a screaming warning for businesses and organizations globally, Royal Bank of Scotland (RBS) was fined £5.6m in 2010 for failing to implement adequate systems and controls to prevent breaches of UK sanctions during the 2007-2008 period.
According to the FSA’s report, this led to the firm taking “unacceptable risk”, potentially at the entire financial ecosystem’s expense. Specifically, RBS’s failures were related to:
- Inadequate screening of customers
- Failure to screen transactions
- Failure to report transactions correctly
- No regular review of screening filters to ensure they were applied correctly
Following the FSA’s investigation – in which RBS fully cooperated with the authorities – RBS has implemented several measures to ensure their systems and controls don’t put the bank and the financial system at risk.
Image from: theguardian.com