Current track



Current show

Non-Stop HMR!

06:00 19:00

Digital bank investigated by watchdog over money-laundering rules

Written by on 30/07/2021

A money-laundering investigation has been launched by the City watchdog into Monzo, a year after the British digital bank revealed concerns over its financial crime procedures.

The lender said in its annual report that it is facing an inquiry by the Financial Conduct Authority (FCA) investigation into its compliance with UK money laundering regulations.

Investigators are examining the period from 1 October 2018 to 30 April 2021 and could bring criminal charges.

A security officer patrols the entrance area of the headquarters of the new Financial Conduct Authority (FCA) in the Canary Wharf business district of London April 1, 2013.
Image: The FCA said it was unable to comment on the detail of ‘open investigations’

The challenger bank was approached on 7 May by the FCA, and said the probe might result in stricter financial crime requirements.

Monzo said: “The FCA are reviewing and investigating our compliance with financial crime regulation.

“We’re co-operating with them, but we expect it to take time to resolve.

“This could have a material negative impact on our financial position, but we won’t know when or what the outcome will be for some time.”

More from Business

The FCA said it was unable to comment on the detail of “open investigations”.

In its last annual report, which was released a year ago, Monzo said it was looking into its financial crime procedures after a review by the regulator.

It said then that “at the moment they don’t highlight a need to provide for customer detriment due to past actions”.

On Friday, Monzo said it had taken steps to crack down on fraud, which has soared during the COVID-19 pandemic.

The bank introduced a “confirmation of payee” feature to its app to warn people when the name on an account does not match the name of the person they are sending money to.

It also said it is investing more in its financial crime controls and has an “ongoing project to make sure we can meet, then exceed, our regulators’ expectations”.

Subscribe to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

Monzo paid £9.5m in the most recent financial year to compensate customers who fell victim to financial crime, despite taking reasonable steps to protect themselves.

This figure was up from £2.7m the previous year.

The bank said it attracted one million new customers in the financial year, taking its total to five million.

Revenue increased 18% to £79m.

Pre-tax loss increased from £115m to £130m during the period.

 Sky News

© Sky News 2020

Tagged as