Monzo, a top UK-based digital bank, has been hit with a penalty of £21,091,300 for “inadequate anti-financial crime systems and controls.” In a public statement the UK Financial Conduct Authority said the infratctions took place between October 2018 and August 2020. The FCA stated that Monzo repeatedly allowed high-risk customers to open accounts at the bank, noting that the number of users at the bank grew rapidly from around 600,000 in 2018 to over 5.8 million in 2022. Apparently, Monzo struggled to manage the rush of new accounts, thus allowing potential bad actors to use the Fintech’s services. The shortcomings led to the FCA requiring an independent review of the anti-crime protocols. Even so, between August 2020 and June 2022, Monzo was reportedly found to have “repeatedly failed to comply with the terms of the requirement.” Therese Chambers, FCA joint executive director of enforcement and market oversight, commented on the enforcement action: “Banks are a vital line of defence in the collective fight against financial crime. They must have the systems in place to prevent the flow of ill-gotten gains into the financial system. Monzo fell far short of what we, and society, expect.’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. This illustrates the inadequacy of Monzo’s financial crime controls. This was compounded by its inability to properly comply with the requirement not to onboard high-risk customers.” The FCA noted that an initial assessment required a greater penalty of over £30 million, but after Monzo agreed to abide by the requirements, they received a 30% reduction in the fine. The FCA stated that this is the 10th penalty imposed on a bank for failing to control financial crime in the last four years. Update: Monzo has shared the following statement on the penalty assessed by the FCA. Group CEO of Monzo, TS Anil: “The FCA’s findings relate to a historical period that ended three years ago and draw a line under issues that have been resolved and are firmly in the past – with our learnings at the time leading to substantial improvements in our controls. I’m pleased the FCA recognises the significant investments we have made, as well as our ongoing commitment to managing these risks today, as we go from strength to strength as a business approaching 13 million customers. Financial crime is an issue that affects the entire industry – and at Monzo, we have the right team, best-in-class technology and an unwavering commitment to doing all we can to stop it in its tracks.”