NatWest FinCrime graded post 2021

Hi ,

After focussing on the £264.8m 2021 NatWest FinCrime penalty calculation today I want to focus on what has changed in FinCrime at NatWest in the last four years.

Have they kept their promises?

I measured this using the most recent NatWest Group Annual Report 2024 (released Feb 2025) and comparing it to the 2021 Southwark Crown Court sentencing remarks where applicable.

I graded it in three areas:

1. Incentives - Are incentives aligned with financial crime risk management?

2. Spend - What was the projected & current FinCrime risk spend/number of employees?

3. Governance - Who decides what in FinCrime risk and who do they report into?

1. Incentives - Grade: A - bonuses tied to FinCrime penalties

To understand behaviour, look at incentives.

For incentives - read compensation/bonuses.

In NatWest’s case one of the most important incentives for general and exec employees is their bonus pool. It appears to be aligned with adhering to FinCrime risk best practices.

The only downward adjustment (beyond normal performance adjustments) I can see for any bonus pool in the last few years was a 29.5% reduction at company (and Exec level) for the 2021 bonus pool due to the FCA FinCrime 2021 fine (see below).

2. FinCrime Spend/No. of Employees - Grade: B+ - on track with Court’s remarks

• What NatWest said it would do/was doing in 2021

  • The 2021 Sentencing Remarks stated that NatWest had 5k employees across its FinCrime & Fraud team equal to 8% of total group employees

• Where it’s at today in 2025

  • According to their FinCrime statements page, today NatWest says there are “over 5,000 colleagues dedicated to detecting and preventing financial crime and fraud.”

  • As of the 2024 Annual Report there are 59.2k total employees

  • So 5k/59.2k = 8.4% of employees work in Financial Crime and Fraud

  • So the number of employees has stayed roughly the same since the ruling - interesting, potentially has reduced in some areas due to improved technology, maybe not.

• What’s that scale of spend annually on FinCrime & Fraud employees?

  • NatWest Group FinCrime Grad salaries start at £35k

  • Assume an average FinCrime salary with costs of £50-70k

  • Range of £250-350m (based on 5k FinCrime & Fraud employees) spent on FinCrime and Fraud employees annually (my calcs are likely on lower end of actual employee spend)

3. Governance - Grade: A - Clear responsibility for FinCrime

• Financial Crime Executive Steering Group

  • Jointly chaired by Chief Risk Officer and Chief Information Officer

    

    NatWest Annual Report 2024, Page 268

• Group Chief Risk Officer who oversees Financial Crime reports directly into the Group CEO

  

  NatWest Annual Report 2024, Page 174

So across 1. Incentives, 2. Spend/Employees, 3. Governance I give overall very good grades for NatWest in the intervening period.

Next week I’ll go deeper into Metro Bank changes.

Have a great weekend.

Paul