During the investigation, the FSA found that the building society did not have adequate information security procedures and controls in place, potentially exposing its customers to an increased risk of financial crime.
The City watchdog also discovered that Nationwide was not aware that the laptop contained confidential information and did not start an investigation until three weeks after the theft.
Margaret Cole, director of enforcement at the FSA, said: "Nationwide is the UK's largest building society and holds confidential information for over 11m customers. Nationwide's customers were entitled to rely upon it to take reasonable steps to make sure their personal information was secure."
The news of the theft became public last November when Nationwide wrote to all its customers apologising for the breach in security. At the time, Phillip Williamson, its chief executive, said: "I wish to emphasise that there has been no loss of money from our customers' accounts as a result of this incident."
By agreeing to settle at an early stage of the FSA investigation Nationwide has qualified for a 30% discount under the FSA's executive settlement procedures -- without the discount, the fine would have been £1.4m.