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Monzo: UK Bank Watchdog Ends Money Laundering Probe

The U.K.’s financial watchdog has apparently dropped a probe into Monzo’s anti-money laundering system.

That’s according to an item buried deep in the neobank’s annual report issued Monday (June 3), which notes that the Financial Conduct Authority (FCA) informed the company in November that it was no longer “assessing criminal liability relating to Monzo’s compliance with the Money Laundering Regulations 2017.”

The report adds that the FCA is still pursuing an investigation into potential breaches of some of the regulator’s anti-money laundering (AML) rules as a civil matter.

“We continue to cooperate with the FCA in their investigation,” Monzo said.

The report goes on to say that the FCA’s enforcement division is “continuing both their ongoing investigation and the review of our historic compliance with financial crime regulation; we expect it to take time to resolve.”

The investigation was first revealed in 2021. An FCA spokesperson declined to comment on the matter when reached by PYMNTS.

Monzo’s annual report also revealed that the bank had its first ever profitable year.

“This was a landmark year of record growth for Monzo,” CEO TS Anil said in a news release accompanying the report. “We surpassed 9 million personal customers, 400,000 business customers, launched game-changing new products, closed a £500 million capital raise and, as planned, reported our first year of profitability.”

That capital raise was the largest one seen in Europe during 2023, the company said, valuing Monzo at $5.2 billion.

Meanwhile, PYMNTS recently spoke with a group of compliance experts about banks’ efforts to use artificial intelligence (AI) to combat things like fraud and money laundering.

“After all, the fraudsters themselves are using AI to create new attack vectors with speed and success,” that report said. “The banks are locked in an arms race with the bad actors.”

The panelists noted that AI has become accessible enough that it can be consumed and used by just about anyone — for good or for ill.

“You can buy a synthetic identity for around $15,” on the dark web, said Miguel Navarro, head of Client Identity Verification and Authentication at KeyBank.

“It’s a scary world out there … and we need a bit of assistance from AI to help us, in our businesses, make sure that we’re treading safely.”