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The UK financial regulator has fined Monzo £21mn for repeatedly breaching rules against opening accounts for “high-risk customers” after the digital bank took on clients with “obviously implausible information”.
The Financial Conduct Authority started reviewing Monzo’s financial risk controls in 2020 and opened a formal investigation in 2021.
Despite the watchdog imposing a block on Monzo opening new accounts for high-risk customers, the lender “repeatedly failed to comply with the terms of the requirement” and signed up more than 34,000 high-risk clients between August 2020 and June 2022.
Announcing the penalty on Tuesday, the FCA said Monzo had “failed to design, implement and maintain adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime”.
Therese Chambers, FCA joint executive director of enforcement and market oversight, said: “Monzo fell far short of what we, and society, expect.
“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,” she said.
However, Monzo has since “established and completed a financial crime change programme to remediate and enhance its wider financial crime control framework in line with recommendations made in the independent review,” the FCA said.
