Monzo has been fined £21.1 million by the Financial Conduct Authority (FCA) for anti-financial crime systems and control failures, including allowing customers to use implausible addresses such as 10 Downing Street and Buckingham Palace when opening accounts.
Monzo Fined £21m, FCA Says Customers Used ‘Downing Street’ and ‘Buckingham Palace’ as Addresses
The penalty, reduced from over £30 million, follows an FCA investigation into serious weaknesses in Monzo’s financial crime controls in a period when the digital bank grew rapidly to serve more than 12 million customers.
The FCA found that Monzo failed to verify customer addresses for most personal account holders, despite stating it only served UK-based individuals.
This is said to have allowed customers to onboard using P.O. boxes, mail-forwarding services, and “well-known London landmarks” including the prime minister’s official residence and the royal palace.
Some users even reused addresses tied to previously offboarded customers.
The regulator also cited a failure to conduct sufficient due diligence, weak transaction monitoring, and a lack of internal clarity on how to identify politically exposed persons.
It added that over 33,000 high-risk accounts were opened in breach of a regulatory restriction Monzo had agreed to in 2020.
Monzo said it had cooperated fully with the FCA and has since taken steps to overhaul its financial crime framework, including reintroducing address verification and joining fraud prevention database CIFAS.
The FCA stated that Monzo has taken remedial steps in relation to its financial crime framework.
