LONDON–A digital bank has been hit with a fine for sloppy customer verification after users were able to open accounts using as their home addresses the prime minister’s home and Buckingham Palace, as well as the corporate offices of the bank itself.
Digital bank Monzo failure in verification meant it failed to spot the “implausible” use of London landmarks on applications to open accounts, and it was fined £21 million by the Financial Conduct Authority (FCA) for its failures regarding anti-financial crime measures, according to the BBC.
The bank said the regulator’s findings related to problems dating back more than three years and vast improvements had since been made to its systems.
My Home Address? 10 Downing Street
“The FCA’s investigation, which has taken a number of years, found Monzo took on customers using PO boxes, foreign addresses with UK postcodes or ‘obviously implausible UK addresses, such as well-known London landmarks’,” such as 10 Downing St.
According to the FCA, the lack of verification meant it took on risky customers who were based outside of the UK, and illustrated “how lacking Monzo’s financial crime controls were,” the BBC reported.
Numerous Weaknesses
According to the report, not checking the obviously bogus addresses was one of a number of areas in which it failed to mitigate the risk of financial crime.
The BBC noted Monzo had grown rapidly, with the number of customers increasing almost tenfold from around 600,000 in 2018 to over 5.8 million in 2022. It has no physical branches.
