Monzo subject to AML probe as it combats financial crime

The Financial Conduct Authority is looking into potential breaches of the Money Laundering Regulations of 2017, the authority’s principles for businesses and related rules for anti-money laundering and financial crime systems and controls between 1 October 2018 to 30 April this year.

“We’re cooperating with the FCA’s investigation, which is at an early stage,” Monzo said in its annual report.

The challenger bank is not alone. The financial authority sent letters to other British banks in May warning of potential failings in anti-money laundering controls.

Warning a resolution will probably take time, Monzo cautioned: “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.”

Elsewhere in the report, the bank said: “We’ve increased investment in our financial crime controls, by strengthening our team and starting our financial crime controls programme.

“It’s an ongoing project to make sure we can meet, then exceed, our regulators’ expectations. It also helps us to continue doing our part to combat the industry-wide increases in financial crime.”

That includes the authorised push payment fraud, where criminals pretend to be someone else and convince customers to send them money.

“Our customers have suffered because of the increase in financial crime, and it’s also

increased our costs.

“We’ve added features to our app, like confirmation of payee, to help our customers avoid becoming the victims of financial crime. It warns people when they might be getting scammed into sending money to the wrong account,” Monzo said.