Santander dismisses EY: failures in financial fraud consultancy

Santander dismisses EY: failures in financial fraud consultancy

The financial sector is one of the pillars of the global economy, and institutions like Santander depend on top-level consultancies to guarantee the security and integrity of their operations. However, recently Santander, in its UK division, made the surprising decision to end its contract with the consultancy Ernst & Young (EY), which provided crucial services to combat financial fraud. The reason? The bank claims that EY made mistakes and didn't meet its expectations.

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EY's failures and the significant refund

According to a report published by the "Financial Times" on September 26, Santander argues that the quality of the work carried out by EY was so unsatisfactory that the consultancy had to reimburse around £15 million (equivalent to R$ 91.9 million) due to the failure of the project. This situation not only damaged the bank's reputation, but also had a negative impact on its financial results.

The amount of the reimbursement is remarkable and is equivalent to the annual salary of around 19 EY partners in the UK, who were paid an average of £803,000 over the last 12 months until June 2022. This setback not only represents a significant financial loss for EY, but also casts a new perspective on possible cuts to the consultancy's team.

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Dissatisfaction in the financial consultancy sector

The dissatisfaction is not exclusive to Santander or EY. Large consulting firms, known as the "big four" and including Deloitte, PwC, EY and KPMG, have faced criticism and accusations in various places around the world. Reports of employees working long hours, such as the allegations of 16-hour days in Spain, and mass layoffs in the UK after the surge in hiring during the Covid-19 pandemic have become commonplace.

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Challenges for large consultancies

In addition to the Santander case, other major consultancies have faced problems. PwC, for example, approved Americanas' financial statements without identifying "accounting inconsistencies". The company was also involved with Chinese giant Evergrande, which is facing a significant real estate crisis.

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Conclusion

Santander's decision to end its contract with EY highlights the importance of integrity, quality and compliance in relationships between financial institutions and consultancies. Trust and the delivery of high-quality results are key to maintaining successful partnerships in this critical sector. The situation also raises questions about the regulation and scrutiny needed to ensure that consultancy services meet the required standards. The story of Santander and EY is an example of how integrity and professionalism must be paramount in all financial transactions and consultancies.

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