The Financial institution of England is inspecting claims that the excessive avenue lender Metro Financial institution put prospects’ knowledge in danger by allegedly misusing software program on the centre of a long-running authorized dispute.
Final month the central financial institution’s whistleblowing group was contacted by an individual elevating considerations concerning the integrity and safety of software program used to attach Metro Financial institution’s in-branch coin-counters – often called Magic Cash Machines – to buyer accounts.
The communications, seen by the Guardian, claimed that the unique Magic Cash Machine software program “was not made for use on a web-based banking system” however had been constructed out by the financial institution in a manner that allowed money to be deposited instantly into buyer accounts, probably creating weaknesses within the system.
The whistleblower additionally claimed that the supply code for the machines could have been shared by Metro with different events in a manner that left buyer accounts “prone to compromise”, suggesting that money might be accessed by potential hackers and unhealthy actors.
Collectively, these points probably introduced a “vital safety danger to Metro Financial institution UK’s community”, the e-mail stated.
The whistleblowing group within the Financial institution of England is now reviewing the allegations and has shared the communications with the Metropolis watchdog, the Monetary Conduct Authority.
The Financial institution and the FCA declined to remark. Metro Financial institution didn’t instantly reply to the allegations.
Metro Financial institution, which has about 2.7 million prospects and 76 branches, has not reported any incidents or complaints of safety and knowledge breaches to this point.
The lender has been in a long-running authorized dispute concerning its coin-counting machines, that are primarily designed to permit youngsters so as to add up small change and which characteristic energetic animations, together with of its mascot, Metro Man.
A US firm, Arkeyo, offered the software program to Metro for six years and claims that the lender later leaked its supply code to a rival agency. It has been pursuing Metro by US courts since 2017 and filed a contemporary lawsuit within the UK in 2022 in an try and sue the financial institution for £24m.
Arkeyo claims that the lender infringed its copyright and misappropriated commerce secrets and techniques referring to cash counting machines.
Excessive court docket paperwork define how Metro and Arkeyo labored collectively between 2010 and 2016 and the way the connection broke down over the next 12 months. Arkeyo claims Metro then instructed a Chicago-based firm referred to as Saggezza to reverse-engineer and duplicate Arkeyo’s software program. Saggezza has denied wrongdoing.
Metro stated it couldn’t touch upon ongoing authorized proceedings, nevertheless it addressed the case in its newest annual report. “We imagine Arkeyo LLC’s claims are with out benefit and are vigorously defending the declare,” it stated.
The Financial institution of England criticism, and ongoing authorized dispute, comes throughout a difficult interval for Metro Financial institution, which rushed to safe a £925m deal in October to be able to keep away from a possible breakup or takeover.
The financial institution was co-founded by the US billionaire Vernon Hill and have become the UK’s first new excessive avenue lender in 150 years when it launched in 2010. Metro grew considerably within the UK, taking up established excessive avenue rivals by providing extra handy opening hours and dog-friendly insurance policies.
In 2019 an admission that it had made an accounting mistake led to the largest single-day collapse in a UK financial institution’s share worth since 2008. The mishap shook confidence within the financial institution and was quickly adopted by the departures of Hill and its chief govt, Craig Donaldson.
Final 12 months Metro Financial institution was thrown into additional turmoil after failing to persuade regulators to loosen capital guidelines. The regulator’s resolution left Metro with a shortfall on its stability sheet, inflicting market panic, till it secured the emergency deal that left it 53%-owned by the Colombian billionaire Jaime Gilinski Bacal.
Earlier this month Metro stated it was slicing 1,000 jobs and ending its seven-day department mannequin, after practically tripling the dimensions of its cost-cutting plan following the rescue deal.