Santander UK’s financial crime consultants at EY have repaid £15 million to the bank and are no longer working for the lender. The dispute between Santander and EY arose from their collaboration on “Project Morgan,” and it revolved around the quality of assistance provided by EY. Santander claimed that the quality of work delivered by EY was poor, which led to the multi-million pound refund and the termination of their contract.
As a result of this dispute, there is now the possibility of cutbacks in EY’s UK financial crime advisory team, which currently consists of 150 members. The size of the team is expected to be significantly reduced.
“Project Morgan” experienced significant difficulties over an extended period, and the financial settlement resulting from the dispute negatively impacted the results of EY’s UK financial services division for the most recent financial year ending in June.
It remains unclear whether Santander has brought this work in-house or assigned it to another firm.
The refunded amount of £15 million is roughly equivalent to the annual pay of approximately 19 of EY’s UK partners, who earn an average of £803,000.
EY, one of the Big Four consultancies, had been engaged by Santander to enhance its anti-money laundering (AML) and financial crime processes in response to regulatory scrutiny. In December, the Financial Conduct Authority (FCA) fined Santander £108 million, one of its largest penalties related to AML processes, for failings that occurred between 2012 and 2017. Santander had reported investing over £700 million over the previous five years in a program to revamp its financial crime systems.
While the dispute has raised concerns about potential redundancies in EY’s UK financial crime advisory team, sources close to EY’s management have suggested that the decision may be driven by broader market factors.
Despite the dispute, EY continues to work with Santander on other matters globally, according to an insider. EY has chosen not to comment on the situation.
By FCCT Editorial Team
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