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Bank of England Investigates Metro Bank Over Potential Customer Data Risk

By Nithya Bose in Business News, posted April 1, 2024

The Bank of England is has launched an investigation into whether Metro Bank has compromised customer data by allegedly misusing software.

Last month, a whistleblower claimed that software used to connect the bank's in-branch coin counters, called Magic Money Machines, to customer accounts is a security risk.

These claims suggest that the software, originally not designed for online banking systems, was adapted by Metro Bank in a way that could weaken the system’s security.

This adaptation allowed for cash deposits to be made directly into customer accounts, but actually potentially exposed them to unauthorized access attempts.

The whistleblower has raised concerns that Metro Bank's sharing of the machine's source code with third parties could make customer accounts vulnerable to cyber threats.

After receiving these claims, the Bank of England's has started a review of the security ofteh software and involved the Financial Conduct Authority (FCA) in the matter.

However, both organisations have refrained from commenting directly on the ongoing investigation.

Metro Bank serves approximately 2.7 million customers across 76 branches in the UK.

It has yet to report any specific incidents or customer complaints about these security and data breach concerns.

The bank is also embroiled in a separate but related legal battle with Arkeyo, a US company that accuses Metro Bank of leaking its software's source code to a competitor.

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The case dates back to 2017, with Arkeyo seeking damages of £24m in UK courts, alleging copyright infringement and misappropriation of trade secrets by Metro Bank.

The legal case and the whistleblower's allegations arrive amidst a tumultuous period for Metro Bank.

After facing a series of challenges, including a significant accounting error in 2019 and regulatory pressures, the bank recently secured a £925m deal to prevent a possible dissolution or acquisition.

The bank has also announced job losses and the cessation of its seven-day branch operation model as part of an expanded cost-reduction strategy.

This all follows an emergency deal that meant it is now majority-owned by Colombian billionaire Jaime Gilinski Bacal.

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