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The UK financial regulator has fined Monzo £21 million for repeatedly violating rules for opening “high-risk customers” after digital banks acquired clients with “clearly incredible information.”
The Financial Conduct Authority began reviewing Monzo’s financial risk management in 2020 and began a formal investigation in 2021.
Despite the fact that Watchdog imposing Monzo to open new accounts for high-risk customers, lenders registered over 34,000 high-risk clients between August 2020 and June 2022, as lenders “repetitively failed to comply with the terms of the requirements.”
Announced the penalty on Tuesday, FCA said Monzo “failed to design, implement and maintain appropriate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime.”
“We are pleased to announce that there are many factors that can be used to implement this program,” said Therese Chambers, co-executive director of FCA’s enforcement and market surveillance.
“Monzo hired customers based on limited and in some cases clearly incredible information, as they use famous London landmarks as addresses,” she said.
However, Monzo has since “established and completed a Financial Crime Change Program to improve and strengthen the broad financial crime control framework in line with recommendations made in the independent review,” the FCA said.
