Monzo reports losses growth and FCA investigation

Friday 30 July 2021 13:35 CET | News

The FCA has launched a formal investigation into Monzo’s anti-money laundering practices, which could carry both civil and criminal liability, says AltFi.

The digital bank, which published its annual report at the end of July 2021, saw losses increase to GBP 129.7 million for the year ending 28 February 2021, up from GBP 113.8 million in the same period in 2020. Monzo revealed in 2020 that there were ‘material uncertainties that cast doubt on our ability to continue as a going concern’, and the 2021 report is seems similar.

Monzo’s directors continue to recognise that there are still ongoing ‘material uncertainties’ over the bank’s ability to operate. Also, on 7 May 2021, the FCA informed Monzo that it has ‘started an investigation into our compliance with financial crime regulation’, after initially telling the bank to appoint someone internally to oversee the initial review into its financial crime practices in August 2020.

Monzo’s apparent breaches date all the way back to 1 October 2018 and the FCA is looking into the issues as both a potential civil and criminal case, with Monzo saying that the investigation ‘could have a material negative impact on our financial position’.

Monzo also saw its customer deposits increase by over GBP 1.7 billion to more than GBP 3.1 billion in 2021 and the bank’s revenue also increased from GBP 67 million in 2020 to GBP 79 million in 2021. Monzo also added more than a million customers over 2020, now counting more than 5 million users, has amassed over 770,000 business customers and a further 210,000 Monzo Plus and Monzo Premium customers. Those paying customers now account for 25% of Monzo’s revenue.

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Keywords: FCA, challenger bank, online banking, financial crime
Categories: Banking & Fintech
Countries: United Kingdom
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Banking & Fintech

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