Monzo fined $28 million by UK
The UK’s Financial Conduct Authority (FCA) has imposed a penalty of £21.1 million ($28.6 million) on digital banking app Monzo for significant shortcomings in anti-financial crime controls from October 2018 through August 2020. The penalty tracks a time when Monzo’s systems did not properly monitor onboarding customers, evaluate risk, and identify suspect activity as the company quickly expanded its user base.
The FCA discovered that Monzo permitted thousands of new accounts to be opened with implausible addresses, such as high-profile addresses like Buckingham Palace and 10 Downing Street. Further, the bank onboarded more than 34,000 high-risk customers when it was under regulatory restrictions for part of the period in question.
Originally to face a £30 million fine, Monzo was given a 30% reduction for its cooperation with the investigation and agreement to settle. The bank has since made significant enhancements to compliance, such as joining the UK’s anti-fraud service CIFAS and making upgrades to its onboarding and transaction monitoring systems.
The CEO of Monzo, TS Anil, recognized the failings and cited that these have been resolved. Despite the failings in compliance, Monzo showed robust financials in FY2025 with more than £1.2 billion in revenue and a pre-tax profit of £94.5 million.
The episode highlights the difficulties fintech companies have in reconciling aggressive expansion with regulatory compliance. It also puts more pressure on neobanks to enhance their defenses against financial crime as they expand operations in a heavily regulated environment.
