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A money laundering investigation is causing difficulties for online bank Monzo

Author: Nicola Sharp  25 August 2021

Posted in: Anti-Money Laundering.

Nicola Sharp of financial crime specialists Rahman Ravelli sees the situation as part of a wider course of action by the Financial Conduct Authority.

The digital bank Monzo is facing further problems following the announcement it is being investigated over money laundering.

Monzo revealed in its annual report that the Financial Conduct Authority (FCA) is examining whether the bank has failed to meet its anti-money laundering obligations. Now lenders that provide saving products with a total value of £1 billion to Monzo customers have expressed serious concerns, with one stopping making any new offers.

OakNorth has temporarily withdrawn new savings products for Monzo customers because of the FCA investigation. Some of Monzo’s other lenders are insisting that the bank gives them more details about the checks it carries out on customers.

In its annual report, Monzo stated that the FCA was investigating it over possible civil and criminal liability regarding alleged breaches of rules on money laundering in the three years from April 2018 to April this year.

Since being founded in 2015, Monzo has grown quickly, signing up five million customers. But it has found it difficult to build the lending side of its business. While it believes it can make a profit next year, it lost £130 million last year.

The Monzo situation is another example of the FCA ramping up its investigations into the UK banking sector in a bid to tighten anti-money laundering (AML) and financial controls. The FCA notified a number of the UK retail banks earlier this year about potential shortcomings in AML procedures. Monzo, along with the rest of the UK banking sector will need to check, revise, monitor and ensure implementation of their AML practices in order to ensure they stand up to scrutiny.

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Nicola Sharp

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Nicola is known for her fraud, civil recovery and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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