The Financial Conduct Authority (FCA) has issued a £21 million fine to Monzo Bank Ltd for failing to maintain effective systems to combat financial crime between October 2018 and August 2020

Monzo Bank has come under scrutiny for repeated failures in managing financial crime risks. Despite a dramatic rise in customers—from approximately 600,000 in 2018 to over 5.8 million by 2022—the bank’s crime prevention infrastructure lagged significantly behind its rapid growth.

According to the FCA, Monzo did not develop or uphold adequate systems for onboarding new customers, assessing risk, and monitoring transactions. These widespread shortcomings led to an enforced independent review of the bank’s anti-financial crime framework starting in August 2020.

In parallel with the review, Monzo was barred from opening accounts for high-risk clients. Yet between August 2020 and June 2022, it violated this condition by onboarding more than 34,000 such individuals.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, emphasized the seriousness of the issue: “Banks are a frontline defense against financial crime. Monzo not only failed to meet expectations—it onboarded users using dubious or clearly false information, such as famous London landmarks listed as addresses. Its inability to follow the restrictions placed on high-risk customer onboarding further highlights its insufficient controls.”

In response, Monzo has completed a major reform program aimed at strengthening its financial crime defenses, aligning with recommendations made during the independent review.

The FCA remains committed to ensuring that financial institutions maintain robust safeguards against criminal activity. Notably, this marks the tenth time in four years the agency has levied penalties against banks over such failures.