The FCA has fined Monzo £21m for failings in its financial crime systems and controls. The failings became apparent as Monzo’s customer base and its product offering grew rapidly, and its financial crime prevention controls failed to keep pace. Its policies and procedures, assessed as adequate in 2016, were being updated following FCA observations in 2018, but the bank’s MLRO left in October 2018 and the bank operated with other senior staff managers holding the relevant responsibilities on an interim basis. The FCA found that:
- between October 2018 and August 2020, the bank had not designed, implemented or maintained adequate customer risk assessment, onboarding and transaction monitoring tools – and this led to the FCA requiring a full independent review and also imposing a requirement not to open accounts for high-risk customers; and
- between August 2020 and June 2022 it repeatedly breached that requirement and signed up over 34,000 high-risk customers.
The FCA noted that Monzo had onboarded customers on limited and, as it said, in some cases implausible information – giving the example of customers using London landmarks as an address as well as PO Boxes. It accepted that this meant it could not be sure that all its customers were actually in the UK.
The bank has now put in place a financial crime change programme in line with the recommendations in the independent review.