Monzo fined £21M by UK regulator for failing to block fraudulent accounts with fake addresses like Buckingham Palace

A digital bank accepting customers who claimed to live at Buckingham Palace and 10 Downing Street sounds like a punchline. But for Monzo, it just turned into a £21 million problem.

Britain’s Financial Conduct Authority (FCA) has fined digital banking startup Monzo after finding that the company failed to put proper systems in place to stop financial crime.

“The FCA has fined Monzo Bank Ltd £21,091,300 for its inadequate anti-financial crime systems and controls between October 2018 and August 2020. Monzo also repeatedly breached a requirement preventing it from opening accounts for high-risk customers between August 2020 and June 2022,” the FCA wrote on its website.

Digital Bank Startup Monzo Fined Over £21M Over Anti-Money Laundering Lapses

The regulator said the digital bank didn’t do enough to verify customer identities or flag suspicious activity between October 2018 and August 2020—a stretch of time when Monzo was growing fast and onboarding new users at scale.

“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,” said Therese Chambers, the FCA’s joint executive director of enforcement and market oversight.

The fine came after Monzo reportedly signed up more than 34,000 high-risk customers, even after the regulator put restrictions in place. According to the FCA, the bank was told to stop opening accounts for those flagged as high risk back in 2020. But between August 2020 and June 2022, it kept doing it anyway. Just a year ago, Monzo turned profitable for the first time after 9 years of operation

Monzo’s internal checks failed to catch fake addresses, including applications that listed Buckingham Palace, 10 Downing Street, and even Monzo’s own business address as the customer’s home.

Monzo CEO TS Anil said in a statement that the issues were “firmly in the past” and that the company has made “substantial improvements” since then, Reuters reported. “We’re committed to stopping financial crime,” Anil added.

Founded in 2015, Monzo is one of the most well-known UK-based fintechs, competing with the likes of Starling Bank and Revolut. While these app-based banks have reshaped how millions handle their money, regulators have grown increasingly concerned about whether their anti-money laundering systems are keeping up.

Starling Bank, for example, was fined £29 million in 2024 after the FCA found its fraud and sanctions screening systems were so weak they left the financial system “wide open to criminals.”

Despite the fine, Monzo’s business hasn’t slowed. The company recently reported a pre-tax profit of £60.5 million for the year ending March 31, 2025—more than quadrupling the £13.9 million it posted the previous year. When asked about a potential IPO, Anil said it was still “too early” to talk specifics.