(qlmbusinessnews.com . Wed 9th Jul, 2025) London, UK —
FCA Slaps Monzo with £21M Penalty over Financial Crime Control Failures
Digital challenger bank Monzo faced penalties amounting to £21 million by the Financial Conduct Authority (FCA) after it emerged that the bank had allowed accounts to be opened using highly improbable UK addresses, including notable landmarks like 10 Downing Street and Buckingham Palace. The investigation also revealed cases where individuals set up accounts claiming the bank's own headquarters as their residence.
This oversight was a reflection of the bank's failure to implement rigorous address verification checks, inadvertently opening its doors to customers using post office (PO) boxes, overseas addresses paired with UK postcodes, and other evidently dubious UK locations. Such lapses in Monzo's financial crime controls highlighted the ease with which high-risk individuals, particularly those residing outside the UK, could exploit the system.
The inquiry by the FCA uncovered significant shortcomings in Monzo's defences against financial crime, spanning a period between October 2018 to August 2020, with additional breaches noted up until June 2022 regarding the prohibition on servicing high-risk clients. The regulator underscored that effective systems must be in place within banks to prevent the entry of illegitimate funds into the financial network, stating that Monzo's efforts significantly missed the expected and societal standards.
Despite Monzo's rapid ascent in the banking sector, growing its customer base from roughly 600,000 in 2018 to over 5.8 million by 2022, its financial crime safeguards failed to evolve in tandem with its expansion. The allure of Monzo's digital-first approach, devoid of traditional physical branches, contributed to its swift growth.
In response to the FCA's findings, Monzo's CEO, TS Anil, acknowledged the rectification of the cited issues, which he described as historical and now firmly resolved. He emphasized the comprehensive enhancements made to the bank's systems to staunch financial crime, asserting Monzo's commitment to combating this sector-wide challenge with vigour.
Monzo's penalty for its inadequate anti-financial crime frameworks marks a critical juncture for the bank, underlining the essential role that financial institutions play in safeguarding against the infiltration of ill-gotten gains within the broader financial system.
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