FCA Fines Monzo $28.5 Million for Accepting ‘Implausible’ Customer Info

Monzo, a digital bank in the United Kingdom, was fined 21,091,300 pounds (about $28.5 million) for deficient financial crime controls.

The U.K.’s Financial Conduct Authority (FCA) announced the fine in a Tuesday (July 8) press release. The fine covers a period between October 2018 and August 2020. During that time, Monzo failed to establish and maintain proper customer onboarding, risk assessment and transaction monitoring.

“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 in the release. “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.”

Monzo’s initial failings led the FCA to require a review of the bank’s financial crime framework in August 2020 and implement a requirement blocking Monzo from opening new accounts for high-risk customers, per the release.

However, between August 2020 and June 2022, Monzo failed to adhere to this requirement, signing up more than 34,000 high-risk customers, the release said.

In a statement provided to PYMNTS, Monzo CEO TS Anil said the FCA’s findings cover a period that ended three years ago and “draw a line under issues that have been resolved and are firmly in the past.”

The things Monzo learned from that period helped it make improvements to its financial crime controls, Anil said.

“I’m pleased the FCA recognizes 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,” Anil said. “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.”

Fraud and anti-money laundering concerns drew increased regulatory scrutiny into the U.K.’s digital banking sector last year after the FCA fined two of Monzo’s contemporaries, Starling Bank and Metro Bank, for failing to implement proper financial crime controls.

Meanwhile, Monzo last month reported growth for its fiscal year 2025, with revenue and deposits both up 48%, to a respective 1.2 billion pounds and 16.6 billion pounds.