Barclays Fines Signal a Deeper Challenge for UK Wire Transfer Regulation Compliance

The £39.3 million fine imposed on Barclays this month (its second FCA sanction in as many weeks) has dominated headlines, reinforcing the view that UK banks are still falling short on customer due diligence (CDD) and financial crime controls. But there’s a deeper issue lurking beneath these public failings: whether institutions are properly complying with the UK’s wire transfer regulation (WTR) obligations, ensuring complete traceability of funds in an increasingly complex and opaque financial landscape.

From Onboarding to Ongoing Monitoring: A Traceability Mandate

Regulation (EU) 2015/847, still embedded in UK law post-Brexit, imposes strict requirements on payment service providers to ensure that all wire transfers carry complete and accurate information about the payer and payee. This regulatory architecture is designed to enable traceability, so critical in the fight against money laundering and terrorist financing.

The Barclays case illustrates how the failures in due diligence and transaction monitoring can easily translate into failures to comply with WTR obligations. Stunt & Co’s account received 561 payments from Fowler Oldfield, many in suspicious round sums of £100,000; a clear transactional pattern that demanded closer scrutiny. Yet, Barclays did not fully reassess this relationship until years later, in 2021, when the FCA charged NatWest in a related case.

This raises the question: Was Barclays systematically ensuring that these payments were accompanied by the required payer and payee information under the WTR? And more broadly, how many banks operating in the UK are proactively auditing their transaction pipelines for full WTR compliance, not merely ticking onboarding boxes?

Pooled Accounts: A Hidden Vulnerability

The WealthTek fine highlights another critical area of WTR exposure: pooled client accounts. By their nature, these accounts aggregate funds from multiple underlying clients, potentially obscuring the identity of the true payer or payee. Regulation 2015/847 requires that payment service providers be able to furnish complete traceability data within three working days of a request.

The FCA has now made its expectations explicit: banks must not simply rely on a client’s regulated status but must actively understand the business model and assess the risks inherent in pooled structures. In practice, this means banks must assess not just whether pooled accounts are permitted but whether the account holder can provide the underlying information to meet WTR requirements and whether the bank itself can respond promptly and accurately to traceability requests.

Wire Transfer Regulation Compliance as an Ongoing Obligation

Perhaps the most important lesson from these cases is that compliance is not a one-time exercise at onboarding but an ongoing obligation. The FCA’s criticism of Barclays emphasises failures to update customer risk assessments in light of evolving intelligence and red flags.

For wire transfer regulation compliance, this requires banks to embed traceability checks at every stage:

• Initial onboarding must ensure that systems are capable of collecting WTR-compliant payer and payee data.

• Ongoing monitoring must include regular validation that the information remains accurate and complete.

• Trigger events such as intelligence on counterparties, enforcement action involving connected entities, or suspicious transaction patterns should automatically prompt a review of whether WTR obligations are still being met for affected accounts.

A Turning Point for UK Banks?

The FCA’s actions send a clear signal that UK banks must move beyond regulatory formality and embrace traceability as a critical operational discipline. In the coming months, we can expect supervisory attention to focus not just on CDD frameworks but also on how firms comply with the letter and spirit of WTR obligations, including their readiness to supply accurate payer/payee information upon request.

For many institutions, this will require investment in technology, policy reform, and perhaps a wholesale review of the viability of high-risk products like pooled accounts. Some may choose to exit these lines of business altogether, as Bharaj suggests.

Conclusion: From CDD Failures to WTR Exposure

Barclays’ repeated fines over the past decade, spanning failures with PEP transactions, suspicious transactions at Stunt & Co, and pooled client money at WealthTek, show a worrying pattern. Each failure underscores the urgent need for UK banks to rethink their approach to financial crime compliance as an integrated discipline, with WTR compliance as a central pillar, not an afterthought.

The stakes are high. Without robust traceability, the financial system becomes a playground for criminals and a target for regulatory enforcement. It’s time for banks to meet the FCA’s challenge: to take responsibility, act promptly, and ensure that every payment in and out of the UK financial system is fully traceable and compliant with the law.

Call to Action: Build Knowledge, Build Compliance

At OpusDatum, we recognise that wire transfer regulation compliance is one of the most operationally challenging, but essential, aspects of modern financial crime control.

That’s why we’ve established the OpusDatum WTR Knowledge Hub, a dedicated resource centre designed to help firms:

• Decode the practical application of Regulation (EU) 2015/847 and its UK transposition

• Access guidance on dynamic customer risk assessment and traceability frameworks

• Navigate high-risk areas such as pooled account structures and cross-border payment chains

• Benchmark their compliance programmes against regulatory expectations

The WTR Knowledge Hub is designed for practitioners, by practitioners bringing together regulatory insight, industry case studies, and operational best practices in one accessible platform.

For organisations that want to go further, OpusDatum also provides advisory services to support tailored WTR readiness reviews and implementation roadmaps, ensuring your firm is prepared for enhanced supervisory scrutiny.