The bank did not transfer funds totalling more than £183m to beneficiaries when it should have done with 40,428 customers directly affected.
It also failed to disclose information relating to the issues with the probate and bereavement process to the FCA after it became aware of them.
In some cases, funds were held for many years contributing to beneficiaries being deprived of the use of them for a considerable amount of time.
Santander took too long to address the issues within its probate and bereavement process once it became aware of them.
And it was too slow to commence remediation exercises to transfer funds from affected accounts to beneficiaries.
Interest and compensation paid
Since 2015, Santander has carried out remediation exercises, to transfer funds from affected accounts to beneficiaries, the FCA said.
These exercises are almost complete and where possible the bank has located beneficiaries and transferred funds to them or is in the process of doing so.
Interest on the funds along with compensation for any consequential loss has also been paid to beneficiaries where appropriate.
Took too long
FCA executive director of enforcement and market oversight Mark Steward said: “These failings took too long to be identified and then far too long to be fixed.
“To the firm’s credit, once these problems were notified to the board and senior management, they were fixed properly and promptly.
“But recognition of the problem took too long.”
He added that the regulator would continue to be looking out for firms with poor systems and controls and would take where necessary to protect consumers.
“Firms must be able to identify and respond to problems more quickly especially when they are causing harm to customers,” Steward added.