Digital Bank Monzo has come under scrutiny of the financial watchdogs! It is being investigated by the Financial Conduct Authority (FCA) over financial criminal laws, the bank said.
FCA’s Notice
The FCA sent official notices to several banks, including Monzo in May, warning of a failure in their efforts to combat money laundering and abiding by anti-money launderig regulations.
Monzo said that it fully supported the FCA’s investigation and will cooperate at every step.
This comes after the flood of complaints from customers that Monzo received in 2020.
What Did The Bank Say?
“Over the past year we have made major investments in our controls in this area as a priority and will continue to invest heavily in this part of the business.
“The FCA’s investigation remains at an early stage. Our operations are unaffected and we remain committed to serving our customers.”
Customer Complaints
Hundreds of Monzo customers said they were left penniless when their accounts were abruptly shut down and no access was given to them during the first coronavirus wave in 2020, as per report of Guardian.
In response to the Guardian investigation, the digital bank allowed access to a customer’s account and apologized, saying “we don’t always get this right”.
However, Monzo bank still said that in 95% of cases, they made the right decision in freezing accounts.
“In May 2021, the FCA notified us that it had started an investigation into our compliance with the Money Laundering Regulations 2017, potential breaches of some of the FCA Principles for Businesses and related FCA rules for anti-money laundering and financial crime systems and controls between 1 October 2018 to 30 April 2021,” Monzo revealed to stakeholders in their annual report.
Financial Position Of Monzo
The online bank claims that the financial institution is “reviewing and investigating” its compliance with financial crime laws, and that the investigation is “still in its infancy”, meaning it will take some time to complete it.
“This could have a negative impact on our financial situation, but we will never know what the outcome will be,” Monzo said.
The bank reported a 23% increase in new customers to $ 5 million, compared to 2020, while pre-tax losses also skyrocketed by 13% to £ 130m. It still has to make a profit.
