FCA Fines Monzo £21m After Onboarding Clients with “Implausible” Addresses

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Digital bank Monzo has been fined £21.1 million ($28.7 million) by the UK’s Financial Conduct Authority (FCA) for “systemic failings” in its anti-financial crime framework between October 2018 and August 2020. 

In particular, Monzo is said to have “failed to design, implement, and maintain adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime,” prompting an independent review.

The FCA found Monzo’s anti-financial crime practices did not keep pace with the bank’s rapid growth. Its customer base surged from around 600,000 in 2018 to 5.8 million by 2022. During this period, Monzo onboarded over 34,000 high-risk customers, despite being banned from doing so. The bank also accepted “implausible” customer addresses, including Buckingham Palace, 10 Downing Street, and Monzo’s own headquarters in London.

Monzo received a 30% discount on the original £30.1 million fine by cooperating with the FCA. CEO TS Anil said “substantial improvements” have since been made.

This marks the FCA’s tenth fine on a bank for financial crime risk failings within four years, signaling heightened scrutiny for retail banks in the UK. In 2024, fellow digital bank Starling was fined £29 million ($39.4 million) for similar AML shortcomings.

The decision underscores the increasing pressure on fast-growing digital banks and fintechs to ensure compliance frameworks keep pace with their expansion.