EY Repays £15M to Santander UK Over Fincrime Dispute

EY has returned £15M to Santander UK following a disagreement over the quality of work in their financial crime consultancy division. The dispute has resulted in the termination of EY’s contract with Santander, potentially leading to significant redundancies within EY’s financial crime team in the UK.

The Dispute and Its Consequences

Santander UK had engaged EY for their “Project Morgan”, aimed at improving the bank’s anti-money laundering (AML) and financial crime processes. The dispute arose when Santander claimed the quality of EY’s work to be unsatisfactory, culminating in the £15M refund earlier this year.

The fallout from the dispute might result in significant cutbacks within EY’s UK financial crime advisory team, which comprises 150 members. The fallout from “Project Morgan” has already impacted EY’s UK financial services division’s recent financial year results, which ended in June.

Santander’s Regulatory Challenges

This dispute has come in the wake of Santander UK’s ongoing regulatory issues. The Financial Conduct Authority (FCA) fined the bank £108M in December—one of its largest fines for AML processes—for failings between 2012 and 2017. In response, Santander claimed to have invested over £700M in the past five years to overhaul its financial crime systems.

The bank has expressed its commitment to keeping pace with technological changes and ensuring compliance with best practices. However, it remains unclear whether the work previously handled by EY has been moved in-house or assigned to another company.

Potential Redundancies at EY

While the dispute has sparked concerns of potential redundancies within EY’s UK financial crime advisory team, a source close to EY’s management has suggested these potential job cuts are more reflective of broader market demand. Despite the dispute and contract termination, EY continues to work with Santander on other matters worldwide.