The UK competition regulator has expressed “concerns” over an “underlying weakness” at fintech unicorn Starling Bank.
The Competition and Markets Authority (CMA) issued directions to the bank on how to address multiple breaches it made of competition regulation regarding customer satisfaction reporting.
UK banks are required to provide customer details to an externally appointed market research group to conduct customer satisfaction surveys, which feed into the CMA’s banking league tables.
Though Starling regularly performs well in the rankings, the CMA said it had violated regulatory obligations on multiple occasions by excluding customers from the data provided and in other instances “over-reporting” the number of accounts held by their customers.
The CMA said Starling was cooperating well – having alerted the regulator to the issues proactively – however, it warned “formal action may be necessary to prevent a recurrence”.
“We are not convinced that Starling Bank is capable of preventing further breaches,” the regulator stated.
“The CMA is concerned that there may be an underlying weakness in Starling Bank’s procedures.”
Starling has been directed to improve its assessment processes to ensure it complies with all relevant regulations.
Starling was handed a £29m fine from the Financial Conduct Authority (FCA) in October last year for flaws in its financial sanctions screening system.
UKTN has contacted Starling Bank for comment.
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