Bank fined £1m by Isle of Man regulator

RBSI's fine was reduced by 30% following cooperation with the authority

Royal Bank of Scotland International has been fined £1m by the Isle of Man’s financial regulator for breaching its anti-money laundering and countering the financing of terrorism code.

The firm was fined by the island’s Financial Services Authority (FSA) for failing to adequately carry out customer risk assessments in line with the code between 2015 and 2018.

It followed an inspection reviewing elements of the bank's Isle of Man non-personal customer book between June and July 2021.

A spokesman for the bank said it had "already updated and improved our controls and procedures to ensure this cannot happen again”.

A total of 2,239 non-personal customers were integrated into Royal Bank of Scotland International's (RBSI) systems between 2015 and 2018, with inadequate documented Customer Risk Assessments under the code.

Customer risk ratings are crucial to customer due diligence and to identify potential financial crimes.

In a public statement about the fine the FSA said the company had been “unable to demonstrate that its up to date Customer Risk Assessment process was brought into use in a timely manner following the introduction of the Code”.

However it said the customers “were still subjected to a risk rating to a pre-2015 standard during that period”.

'Constructive dialogue'

The authority said it had deemed it “appropriate, necessary and proportionate, in all the circumstances, that RBSI be required to pay a civil penalty imposed”.

But, it said it acknowledged the firm’s "constructive dialogue" with the FSA over the issue, and its continued “customer outreach work”, which would “remediate any remaining cases in the population affected by the breach".

A civil penalty of £1,440,481 was discounted by 30% to £1,008,337 due to the firm's cooperation with the authority.

An RBSI spokesman said compliance with financial services regulations was “of the utmost importance" to the firm.

"While we are in the process of finalising our review of the affected customers, we have already updated and improved our controls", it added.