FCA fines Nationwide £44 million for financial crime failures
The Financial Conduct Authority (FCA) has fined Nationwide Building Society £44,078,500 after identifying serious weaknesses in the society’s anti-money laundering (AML) systems and controls (see also reports from Guardian, BBC).
The regulator’s Final Notice published on 11 December 2025 states that between October 2016 and July 2021 Nationwide’s financial crime controls were not sufficiently effective, creating a material risk that suspicious activity might go undetected.
Nationwide agreed to settle the case early and received a 30% discount, meaning the penalty would otherwise have been approximately £63 million.
Key findings from the FCA investigation
The regulator identified several weaknesses in Nationwide’s systems and governance framework.
Weak customer risk assessments
For much of the period reviewed, Nationwide’s systems automatically classified most customers as “standard risk” unless specific triggers were present.
As a result, only around 2,000 customers out of roughly 18 million were categorised as high risk, which the FCA described as exceptionally low.
This meant Nationwide could not be confident that higher-risk customers had been properly identified.
Insufficient monitoring of customer activity
Nationwide’s transaction monitoring systems were also found to have significant limitations.
Internal reviews described the system as requiring “significant improvement”, while the FCA concluded it provided only partial coverage of money-laundering risks.
Weaknesses included narrow monitoring rules and thresholds that were considered too high to detect some unusual activity.
Gaps in reviewing customer relationships
The regulator also found that for large parts of the period there were no effective processes for regularly reviewing many customer relationships.
Without regular reviews or updated due-diligence information, firms risk losing an accurate understanding of their customers and the risks associated with them.
Business activity on personal accounts
A further issue concerned customers using personal current accounts for business activity, despite Nationwide’s terms prohibiting this.
Because Nationwide did not offer business current accounts during the relevant period, its financial crime controls were not designed to assess or monitor business banking risks, creating additional vulnerabilities.
Example cited by the regulator
The FCA also highlighted a case in which a customer used Nationwide accounts to receive fraudulently obtained payments from the government’s furlough scheme.
Over time the individual received:
- £1.35 million over 13 months, and
- £26 million more within eight days
before the accounts were frozen.
More than £800,000 of the funds was never recovered.
The regulator concluded that stronger monitoring systems could have identified the suspicious activity sooner.
Nationwide’s response
Nationwide has stated in a short statement on its website that the issues related to controls in place prior to July 2021 and were identified through its own internal reviews.
The society says it has since invested significantly in strengthening its financial crime framework, including a major transformation programme to enhance its systems and controls.
Why this matters for a mutual organisation
Nationwide is not a typical bank. It is a mutual organisation owned by more than 16 million members.
Members therefore rely on the society’s governance framework — including its board — to ensure that the organisation operates with strong oversight, effective risk management and accountability.
The FCA’s findings relate to historical issues that the society says it has since addressed. But they also underline an important point: good governance and effective oversight are essential for large financial institutions, particularly those owned by their members.
As Nationwide continues to grow and integrate the Virgin Money business (including some business accounts which will be a new area for the society), maintaining strong controls and governance standards will remain critical for protecting the interests of its members.