Monzo has been hit with a £21 million penalty by the Financial Conduct Authority (FCA) for "repeatedly" opening accounts for "high-risk" customers.
The º£½ÇÊÓƵ fintech firm came under fire from the City regulator for not keeping its anti-crime measures up to speed with its rapid growth in customers and products, as reported by .
A review by the FCA discovered that between August 2020 and June 2022, Monzo registered over 34,000 high-risk customers.
The FCA criticised Monzo for onboarding clients based on "limited, and in some cases, obviously plausible information – such as customers using well known London landmarks as an address".
From 2018 to 2022, Monzo's customer base surged nearly tenfold, reaching 5.8 million users.
However, the FCA has stated that Monzo "failed to design, implement and maintain adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime."
FCA: Monzo 'fell far short'
The FCA expressed that Monzo's shortcomings during this period led to a "comprehensive, independent review" of the company's financial crime controls.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, commented: "Banks are a vital line of defence in the collective fight against financial crime."
"They must have the systems in place to prevent the flow of ill-gotten gains into the financial system. Monzo fell far short of what we, and society, expect."
TS Anil, group chief executive of Monzo, stated: "The FCA's findings relate to a historical period that ended three years ago and draw a line under issues that have been resolved and are firmly in the past – with our learnings at the time leading to substantial improvements in our controls."
"I'm pleased the FCA recognises the significant investments we have made, as well as our ongoing commitment to managing these risks today, as we go from strength to strength as a business approaching 13 million customers. Financial crime is an issue that affects the entire industry – and at Monzo, we have the right team, best-in-class technology and an unwavering commitment to doing all we can to stop it in its tracks."
