Monzo faces a £21m fine for repeatedly opening accounts for high-risk customers between 2002 and 2022, the latest in a string of penalties issued against UK fintechs over financial crime controls.
Founded in 2015, Monzo is one of the UK’s top neobanks with more than 10m customers and £11.2bn in deposits. But the neobank’s financial crime controls have “failed to keep pace with its customer and product growth”, the UK’s Financial Conduct Authority (FCA) said on Tuesday.
The watchdog criticised Monzo for failing to design, implement and maintain adequate customer onboarding, customer risk assessments and transaction monitoring systems to mitigate the risk of financial crime.
“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,” says Therese Chambers, FCA joint executive director of enforcement and market oversight. 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 isn’t the only neobank to be fined lately over issues related to financial crime. In April, fellow UK fintech Revolut was fined €3.5m by European regulators after failing to root out money laundering on its app. And last October, the FCA fined Starling Bank £29m for failings in their financial crime systems and controls.
CEO TS Anil claims the FCA’s findings relate to a historical period and relate to issues that have since been resolved, and are “firmly in the past”.
“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.”
Read the orginal article: https://sifted.eu/articles/monzo-fine/
