Skip to content

EY pays back £15m to Santander UK in dispute over AML quality


Santander UK’s fin crime consultants EY have paid back £15m and will no longer work for the lender. This follows a dispute between the banking giant and the Big Four firm over AML quality, raising the prospect of redundancies at EY’s UK fin crime division.

EY had been recruited to work on what the bank refers to as Project Morgan. However, a dispute over the quality of assistance provided has since resulted in a multi-million-pound refund and the termination of EY’s contract. The dispute centred on the alleged poor quality EY’s work and resulted in the professional services giant refunding £15m earlier this year.

Cutbacks to EY’s UK financial crime advisory team are now on the cards, insiders say, with its current 150-person headcount likely to be slimmed down.

A source told the Financial Times that Project Morgan ‘went badly wrong over an extended period’ and that the financial settlement dented the results of EY’s UK financial services division for the financial year ended in June. It was unclear whether the bank was bringing the work in-house or handing it to another firm.

The amount refunded to Santander is the equivalent of the annual pay of around 19 of EY’s UK partners, who are paid an average £803,000. EY was one of a number of external advisers brought in by the bank to improve its AML and financial crime processes which had drawn scrutiny from regulators.

Last December the FCA fined the lender £108m, one of the largest penalties handed out for AML processes. The penalty related to failings between 2012 and 2017. Santander said it had invested more than £700m over the past five years in a programme intended to transform its financial crime systems.

A spokesperson for the bank said ‘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.’