Digital financial institution Monzo has been fined £21m by the Monetary Conduct Authority (FCA) for insufficient anti-financial crime prevention programs.
In response to the regulator, Monzo didn’t scale its monetary crime controls alongside the fast progress in its buyer base between 2018 and 2022, when Monzo grew from round 600,000 customers to nearly six million.
The FCA stated the challenger financial institution “didn’t design, implement and keep enough buyer onboarding, buyer danger evaluation and transaction monitoring programs to mitigate the danger of economic crime”.
These systemic failings prompted the FCA to require a complete evaluation of Monzo’s monetary crime framework in 2020, which included a requirement stopping Monzo from opening new accounts for “high-risk” prospects.
The FCA additionally stated that between August 2020 and June 2022, the financial institution didn’t adjust to this order, onboarding greater than 34,000 high-risk prospects.
“Banks are an important line of defence within the collective battle in opposition to monetary crime. They should have the programs in place to forestall the circulation of ill-gotten positive factors into the monetary system. Monzo fell far in need of what we, and society, anticipate,” stated Therese Chambers, FCA joint government director of enforcement and market oversight.
“Monzo onboarded prospects on the idea of restricted, and in some instances, clearly implausible data – similar to prospects utilizing well-known London landmarks as an handle. This illustrates how missing Monzo’s monetary crime controls have been. This was compounded by its incapacity to correctly adjust to the requirement to not onboard high-risk prospects.”
Monzo chief government TS Anil informed UKTN: “The FCA’s findings relate to a historic interval that ended three years in the past and draw a line below points which were resolved and are firmly prior to now – with our learnings on the time resulting in substantial enhancements in our controls.
“I’m happy the FCA recognises the numerous investments we now have made, in addition to our ongoing dedication to managing these dangers right now…monetary crime is a matter that impacts all the business – and at Monzo, we now have the appropriate crew, best-in-class expertise and an unwavering dedication to doing all we are able to to cease it in its tracks.”
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