Nationwide Fine £44m Over Weak Financial Crime Controls in UK

Published: 15 December 2025. The English Chronicle Desk. The English Chronicle Online.

Nationwide has been fined £44 million by the Financial Conduct Authority after serious financial crime control failures. The watchdog revealed that weaknesses in the lender’s systems allowed a significant Covid fraud case to go undetected, leaving UK taxpayers £800,000 out of pocket.

The FCA said the issues spanned nearly five years, from October 2016 to July 2021, during which Nationwide knew that some customers were conducting business transactions through personal accounts. At that time, the building society did not offer business accounts, meaning it lacked the proper monitoring frameworks for detecting potential economic crime risks.

This oversight led to one customer receiving 24 fraudulent Covid furlough payments totaling £27.3 million over just thirteen months. Remarkably, approximately £26 million of this amount was deposited in only eight days. HM Revenue and Customs managed to recover £26.5 million from the fraudsters, but the remaining £800,000 represents a loss ultimately borne by taxpayers due to Nationwide’s control failings.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said the building society “failed to get a proper grip of the financial crime risks lurking within its customer base.” She added that delays in addressing weak controls meant serious red flags were missed, causing substantial consequences for the wider UK economy.

The regulator stressed that financial institutions, including building societies and banks, play a crucial role in preventing economic crime. Firms are expected to remain vigilant and ensure robust monitoring to protect both customers and the public.

Nationwide acknowledged the shortcomings, stating, “We are sorry that our controls during the period fell below the high standards we expect.” The building society highlighted that the issues were identified internally and voluntarily reported to the FCA, with full cooperation provided during the investigation.

Since 2021, Nationwide has invested heavily in strengthening its financial crime framework, implementing a wide-ranging transformation programme designed to ensure stronger monitoring and compliance across all operations. The building society emphasised that it does not believe any customers suffered financial loss due to these control issues and remains fully committed to preventing economic crime.

The FCA’s investigation concluded that the failures arose from prolonged weaknesses in the bank’s systems, despite attempts to improve processes over time. Nationwide’s case serves as a stark reminder of the necessity for financial institutions to maintain rigorous oversight, particularly in detecting complex fraud schemes.

With UK taxpayers affected and a £44 million penalty imposed, the ruling reinforces the FCA’s commitment to holding firms accountable. The watchdog’s decisive action highlights the importance of compliance and proactive risk management, ensuring that financial institutions cannot overlook systemic weaknesses without consequence.

Moving forward, Nationwide’s enhanced economic crime controls aim to prevent recurrence of similar issues, reinforcing both customer trust and regulatory compliance. This case also underscores the wider responsibility of financial institutions in the fight against fraud, emphasising that rigorous internal systems are critical in safeguarding public funds and the economy.

The lessons from this case extend beyond Nationwide, illustrating that even well-established institutions must continuously adapt their monitoring systems to address emerging risks and prevent large-scale financial crime. Experts have noted that such incidents can have lasting reputational and financial impacts, making prompt intervention and transparent communication with regulators essential for maintaining credibility.

As financial crime continues to evolve in complexity, regulators and firms alike face increasing pressure to implement robust frameworks that can detect and deter fraud. Nationwide’s substantial fine serves as both a warning and a benchmark for other institutions striving to meet high standards of economic crime prevention. The case highlights the importance of constant vigilance, timely remediation, and investment in advanced monitoring tools to safeguard public and corporate interests.

By confronting past failings and committing to systemic improvements, Nationwide aims to restore public confidence while reinforcing its responsibility to protect the wider UK economy from financial crime.