Anti-Financial Crime & Financial Crime Compliance
Regulatory Intelligence Leadership | Insight | Network

AML, Banking, Compliance, Financial Crime, Regulatory, UK

NEWS: EY pays back £15M to Santander UK, fincrime work terminated in dispute over AML quality

TERMINATED: EY has lost the lucrative contract to supply fincrime advice to Santander UK and has had to pay back £15M to the back in another bruising setback for the Big Four consultancy.


SANTANDER UK’s fincrime consultants EY have paid back £15M to the bank – and no longer work for the lender, it’s been revealed.

A dispute between the banking giant and the Big Four has led to the prospect of redundancies in EY’s fincrime division in the UK.

EY had been recruited to work on the bank’s so-called “Project Morgan” but there was a dispute over the quality of assistance, which has now resulted in the multi-million pound refund and termination of contract.

The dispute centred on the quality of work performed by EY which Santander claimed was poor, leading the professional services giant refund some £15M earlier this year, it’s been reported.

This has now also led to the prospect of cutbacks in EY’s UK financial crime advisory team, insiders said.

The team currently has 150 members, with the size of the group likely tobe reduced significantly.

Project Morgan, “went badly wrong over an extended period” and the financial settlement dented the results of the consultancy’s UK financial services division for its most recent financial year ended in June, a source told the Financial Times.

It is not clear whether the work has now been brought in-house by Santander or handed to another firm.

The amount refunded to Santander is equivalent to the annual pay of about 19 of EY’s UK partners, paid on average £803,000.

EY, one the Big Four consultancies, was one of a number of external advisers brought in by the giant Spanish lender to improve its AML and financial crime processes which had drawn scrutiny from regulators.

Last December the Financial Conduct Authority (FCA) fined the lender £108mn, one of its largest penalties for AML processes, for failings between 2012 and 2017. The bank said it had invested more than £700mn over the past five years in a programme to transform its financial crime systems.

“We need to keep pace with technological change, which involves piloting new platforms and processes to ensure we are complying with best practice and continuing to innovate,” the bank said.

Meanwhile, for EY fincrime advisors in the UK, the debacle has led to fears of of redundancies in the team.

However, a source close to EY’s management claimed the decision to place staff in the division at risk of redundancy, which is subject to consultation, had been driven by wider market demand, according to the FT.

Meanwhile, EY continues to work for Santander on other matters around the world, an insider said.

EY has declined to comment.

AML Intelligence
We hope you enjoyed reading this article

If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!