By Tommy Reggiori Wilkes and Elizabeth Howcroft
LONDON (Reuters) -Britain’s financial regulator has fined digital bank Monzo 21 million pounds ($28.57 million) for inadequate protection against financial crimes, which included taking on customers who had listed London landmarks as their address.
As Monzo grew rapidly, it failed to maintain good enough controls to prevent the risk of financial crime, the Financial Conduct Authority (FCA) said in a statement on Tuesday. The regulator issued a fine of 21.1 million pounds for “inadequate anti-financial crime systems and controls” between October 2018 and August 2020.
Monzo said the problems “have been resolved and are firmly in the past” and that it acted quickly to implement a programme to address financial crime issues in February 2021.
Launched in 2015, Monzo is one of a handful of financial services apps, or “fintechs”, to have emerged in Britain in the last decade, offering financial services via an app.
After a 2020 review, the FCA imposed a requirement on Monzo to prevent it from opening new accounts for high-risk customers. But “between August 2020 and June 2022, it repeatedly failed to comply with the terms of the requirement, including signing up over 34,000 high-risk customers,” the FCA said.
Monzo said in a statement that the FCA’s main findings relate to 2018 to 2020, and that the findings about 2020 to 2022 are “much narrower in scope”.
“Monzo onboarded customers on the basis of limited, and in some cases, obviously implausible information – such as customers using well known London landmarks as an address,” Therese Chambers, FCA joint executive director of enforcement and market oversight, said.
“This illustrates how lacking Monzo’s financial crime controls were.”
“This was compounded by its inability to properly comply with the requirement not to onboard high-risk customers,” Chambers added.
Other fintechs in Britain have triggered regulatory concerns about their controls to stop financial crime. Starling Bank was fined 29 million pounds in 2024 after the FCA found its anti-money laundering controls and sanctions screening systems left the financial system “wide open to criminals”.
($1 = 0.7349 pounds)
(Reporting by Tommy Reggiori Wilkes and Elizabeth Howcroft; Editing by Amanda Cooper and Susan Fenton)
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