The UK's Financial Conduct Authority (FCA) has launched an investigation into Barclays for suspected failings in compliance and anti-money laundering (AML) systems.

According to the FT, the FCA issued a notice in spring of 2022, requiring an independent review of Barclay's crime detection and prevention systems after becoming concerned about a number of know-your-customer and AML cases at the bank.

Specifically, the FCA wrote to Matt Hammerstein, UK retail and wealth division, and head of corporate banking Alistair Currie requesting a Section 166, the report said. A section 166 is part of the Financial Services and Markets Act 2000 which gives the FCA power to "require a firm and certain other persons to provide a report by a skilled person, or itself to appoint a skilled person to produce such a report".

Barclays has not disclosed the Section 166 requirement in its previous reporting, with the company set to report its annual earnings next week.

Authorities in the UK have spent several years attempting to tackle financial controls at its top banks, with London being regularly criticised as a hub for the movement of illicit funds. Natwest was fined over £260 million in late 2021 in the first criminal money laundering case by regulators against a British Bank.

Barclays is currently facing significant scrutiny away from its AML practices. Chief among these is its continued backing of ex-chief exec Jes Staley who was forced to step down in November 2021 over his past relationship with child sex trafficker Jeffrey Epstein.

In 2022, the bank faced humiliation in the US after accidently selling $17.7 billion of structured financial products it did not have authorisation for, leading to a $361 million payment to the US Securities and Exchange Commission and setting aside $450 million to compensate investors.

Barclays was also one of a group of banks fined $200 million for employees' use of unauthorised messaging apps along with the likes of Bank of America, Citigroup, Goldman Sachs, JP Morgan and others totalling more than 10 banks.

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