The Financial Conduct Authority (FCA) has fined digital bank Monzo £21,091,300 for weak anti-money laundering (AML) controls that saw customers register for accounts using addresses including 10 Downing Street, Buckingham Palace and Monzo’s own headquarters.
News of the penalty was disclosed by the FCA at the beginning of July (8 July 2025) after a lengthy investigation by the regulator which started in August 2020.
In its statement, the FCA said that the London-based online bank’s financial crime controls failed to keep pace with its product and customer growth, which increased almost tenfold from around 600,000 in 2018 to over 5.8 million in 2022.
The regulator also found that Monzo repeatedly breached a requirement preventing it from opening accounts for high-risk customers between August 2020 and June 2022.
In particular, Monzo failed to “design, implement and maintain adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime”.
The controls were lax enough that customers were able to register for accounts using “obviously implausible UK addresses when applying for an account”, said the FCA.
Addresses that customers used to open accounts included well-known London landmarks such as Buckingham Palace, 10 Downing Street, and Monzo’s own business headquarters.
While the FCA was undertaking its review, the regulator imposed a requirement preventing Monzo from opening new accounts for high-risk customers.
However, between August 2020 and June 2022, the FCA found that it repeatedly failed to comply with the terms of the requirement, signing up over 34,000 high-risk customers.
Therese Chambers, FCA joint executive director of enforcement and market oversight, said: “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 how lacking Monzo’s financial crime controls were.
“This was compounded by its inability to properly comply with the requirement not to onboard high-risk customers.”
This is the tenth fine the FCA has imposed on a bank for financial crime control failings in the last four years.
At the end of December 2024, the FCA fined Starling Bank £24m for AML failings the financial regulator described as “shockingly lax”.
Staying on top of AML responsibilities is believed to cost UK banks around £34bn each year.
AML Compliance for Banks
Businesses are responsible for adopting and implementing an effective anti-money laundering (AML) programme that demonstrates compliance with their obligations.
Failure to comply has serious repercussions. Not only does it risk their business being used for money laundering and illegal activity, but non-compliance with MLRs and AML policies can lead to substantial fines, legal action and reputational damage.
It may be understandable to some that a company’s AML programme comes second to its main businesses function, and that it is sometimes easy for a busy business to overlook its AML responsibilities or not give it the time or attention it deserves.
However, ignorance, forgetfulness, or unawareness is no excuse, and sanctions for violations are the same.
For this reason, many regulated businesses prefer to outsource their AML commitments to an external compliance specialist, which provides valuable peace of mind and ensures they remain on top of their compliance responsibilities.
At Regulation and Compliance Office (RACO), we help regulated businesses with their AML compliance and other regulatory requirements by implementing efficient policies, procedures, consultancy, and training.
AML Compliance Services
RACO offers bespoke and tailored compliance solutions across a wide range of sectors, including:
If you are a regulated business and need advice or assistance on your compliance obligations, speak to our team today.
To discuss our services in more detail, contact us at 0203 985 8550, email us at info@regulationandcomplianceoffice.co.uk or complete an enquiry form.
