Monzo, the popular digital bank with the bright orange cards, just got a big fine, over £21 million. Why? Because it didn’t do a very good job of stopping financial crime.
Between 2018 and 2020, Monzo’s systems for checking new customers and watching out for suspicious activity were simply not good enough. The bank grew really fast, from 600,000 customers in 2018 to almost 6 million by 2022, but its crime-fighting tools didn’t keep up.
The UK’s financial watchdog, the FCA (Financial Conduct Authority), says Monzo made some very basic mistakes.
For example, it let people open bank accounts using famous London landmarks as their home address. That’s not a joke, someone actually listed a well-known building as where they live, and Monzo said, “Sure, come on in!”
In 2020, the FCA told Monzo to stop opening accounts for high-risk customers while the bank fixed its problems. Monzo agreed… and then went ahead and opened more than 34,000 high-risk accounts anyway over the next two years.
Therese Chambers from the FCA wasn’t impressed. She said banks are supposed to protect the financial system from crime. Monzo, she said, didn’t do that.
To be fair, Monzo has now made changes. It ran a special program to fix its problems and says things are better. That’s good news, but the fine still stands. The FCA clearly wants to send a message: even if you’re a cool, modern bank, you still have to follow the rules.
This isn’t the first time the FCA has fined a bank for weak crime controls. In fact, it’s the 10th time in four years. So Monzo’s not alone. But still, £21 million is a painful lesson.
Hopefully, it’s one they (and others) won’t forget. And next time, maybe don’t let someone claim they live at Big Ben.
