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The UK’s Financial Conduct Authority (FCA) fined Monzo Bank £21.1 million for “serious failures” in its anti-financial crime systems between 2018 and 2020, and for breaching restrictions on opening high-risk accounts for nearly two years after that.
The FCA said Monzo’s rapid growth—from around 600,000 customers in 2018 to more than 5.8 million by 2022—was not matched by adequate controls to detect and prevent financial crime.
The digital bank failed to put in place effective systems for onboarding customers, assessing risk, and monitoring transactions. The regulator ordered an independent review in 2020 and imposed restrictions on onboarding high-risk clients—restrictions Monzo went on to breach by opening over 34,000 such accounts between August 2020 and June 2022.
“Monzo onboarded customers using limited or plainly implausible information—like listing well-known London landmarks as residential addresses,” said Therese Chambers, the FCA’s joint enforcement director. “The firm’s systems simply weren’t up to the task.”
The bank has since completed a major overhaul of its financial crime controls, following recommendations from the independent review. This is the tenth such fine handed to a UK bank for financial crime failings in the past four years.
The case also highlights the FCA’s broader supervisory strategy for retail banks in 2025, which puts renewed pressure on firms to strengthen financial crime controls, customer protections, and operational resilience. The regulator said it expects retail banks to deliver “good outcomes” across six key areas: financial crime, the Consumer Duty, customer access, operational resilience, financial hardship treatment, and sustainable finance.
The FCA noted that the fast rise of “banking as a service” and embedded finance, as well as the entry of big tech into financial services, is creating new challenges for banks, particularly around accountability and control.
Interestingly, Monzo was one of the country’s fintech firms that met with the UK Treasury in May as part of a renewed push to encourage high-profile listings on the London Stock Exchange.
Economic Secretary Emma Reynolds hosted executives from Monzo, Revolut, Clearscore, and OakNorth, alongside London Stock Exchange CEO Dame Julia Hoggett and Simon Walls of the Financial Conduct Authority (FCA).
The talks came as Monzo explores a potential initial public offering (IPO) that could value the neobank at £7 billion, following a sharp rise in fintech activity during 2024.
The Treasury’s outreach comes amid growing concern over the health of London’s public markets. According to LSE data, 88 companies either delisted or moved their primary listings away from the exchange last year, including names like Flutter and Darktrace. Just 18 firms joined the main market in the same period.
Officials hope that landing a major fintech IPO could help reverse that trend and send a message that London remains a viable home for fast-growing tech firms.
