Monzo banking. Credit: Ink Drop, Shutterstock
Britain’s digital bank Monzo has been fined £21 million (€25 million) for failing to prevent financial crime, after it allowed thousands of accounts to be opened using clearly fake or implausible addresses, including Buckingham Palace and 10 Downing Street.
The Financial Conduct Authority (FCA) announced the fine on Tuesday, July 8, citing “completely inadequate” anti-financial crime controls between October 2018 and August 2020, with breaches continuing as late as June 2022.
In a damning statement, Therese Chambers, joint executive director of enforcement at the FCA, said:
“Monzo onboarded customers on the basis of limited, and in some cases, obviously implausible information – such as customers using well-known London landmarks as an address,” Reuters reported.
Fake addresses and banned customers slipped through the cracks at Monzo
The FCA investigation revealed that Monzo allowed over 34,000 high-risk customers to open accounts despite a regulatory ban issued in 2020 specifically prohibiting it from doing so. In some cases, customers who had previously had accounts closed over fraud concerns were able to open new ones with ease.
Among the failures identified by the FCA were:
- Customers registering accounts using royal residences and government buildings like 10 Downing Street
- Use of PO Boxes, mail-forwarding services, and false UK postcodes
- Card orders being redirected overseas soon after accounts were opened
- Multiple accounts linked to a single suspicious address with no proper risk checks
- Business Matters added that some applicants even used Monzo’s own business address as their residential one.
Chambers warned:
“Banks are a vital line of defence in the collective fight against financial crime… Monzo fell far short of what we, and society, expect.”
Founded in 2015, Monzo now has over 12 million customers and is one of the UK’s fastest-growing challenger banks. However, the FCA said its internal systems failed to keep pace with its rapid growth, especially when it came to vetting customers, assessing risk, and detecting suspicious activity.
This latest fine puts Monzo in the company of other UK fintechs facing serious regulatory scrutiny. In 2024, Starling Bank was fined £29 million (€39.4 million) after its systems left the financial sector “wide open to criminals”, according to the FCA.
Monzo: “The issues are in the past”
Monzo has since overhauled its compliance systems and says it’s now meeting regulatory expectations.
TS Anil, Monzo’s CEO, said:
“The FCA’s findings relate to a historical period that ended three years ago. We’ve since invested heavily in our systems and controls. I’m pleased the FCA acknowledges our progress.” Business Matters
Despite the controversy, Monzo reported a sharp rise in profits, with £60.5 million (€82.3 million) in pretax earnings for the year ending March 31, 2025, up from £13.9 million (€18.9 million) the year before. Anil declined to comment on when the bank might pursue a public listing, saying it was “too early” to discuss an IPO, as reported by Reuters.
Is the fintech boom risking financial security?
With multiple digital banks now under fire, the FCA says it plans to tighten oversight across the industry. Monzo’s case highlights a growing debate: Are “move-fast” fintechs cutting corners on fraud prevention in their race to dominate banking?
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