Authorities will look into claims that UK-based banks processed $738m (£594m) of Russian money as part of a multi-billion-pound money laundering scam, the City minister has said.
Simon Kirby said the Government would "do what it takes to prevent and pursue anyone who might seek to abuse our financial system".
High street names including HSBC, Royal Bank of Scotland (LSE: RBS.L - news) , Lloyds and Barclays (LSE: BARC.L - news) have defended their systems for combating financial crime in response to the allegations, published in the Guardian.
They are among 17 British banks or foreign banks with branches in Britain identified by the newspaper's investigation.
It said they faced questions over what they knew about the international scheme and why they did not turn away suspicious money transfers.
Mr Kirby said: "The Financial Conduct Authority and the National Crime Agency take any such allegations seriously."
He said they would "investigate closely" as to whether the claims "would allow the progression of an investigation".
Bank of England governor Mark Carney would not comment directly on the allegations when asked during a press conference, saying the FCA would be "in the lead".
The FCA declined to comment.
Documents uncovered by the investigation reportedly showed that at least $20bn (£16bn) appeared to have been moved out of Russia over a four-year period from 2010 to 2014.
Banking records detailing the scheme were said to have been obtained by the Organised Crime and Corruption Reporting Project and Russian newspaper Novaya Gazeta from anonymous sources.
The documents include details of around 70,000 transactions, including 1,920 that went through UK banks and 373 via US banks.
A spokesman for HSBC said: "The bank has systems and processes in place to identify suspicious activity and report it to the appropriate government authorities."
RBS said: "We are committed to combating financial crime and money laundering in line with our regulations and have controls and safeguards in place to identify, assess, monitor and mitigate these risks."
A Barclays spokesman said: "Barclays complies with the rules and regulations in all the jurisdictions in which it operates and has systems and controls in place to mitigate the risk of the bank being used to facilitate financial crime."
Lloyds said: "We have effective processes in place to check the identity of customers as well as various tools to help identify suspicious activity.
"Where we identify any potential money laundering activity we advise the relevant authorities in line with our legal and regulatory obligations".
UK lenders have previously been caught up in allegations about money laundering.
HSBC revealed last month that it was facing a UK probe over money laundering rules.
In 2012, it agreed a settlement with US authorities involving a $1.9bn fine and being subject to an independent monitor.
Coutts, the private bank owned by RBS, has previously been fined in the UK for violating money laundering rules.