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UK Regulator Fines Monzo £21 Million ($28.6 Million) for Weak Financial Crime Controls

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Britain’s financial regulator, the Financial Conduct Authority (FCA), has fined digital bank Monzo £21.1 million ($28.57 million) for inadequate anti-financial crime systems and controls. The FCA highlighted failures in Monzo’s procedures between October 2018 and August 2020, including accepting customers who used well-known landmarks such as Buckingham Palace and 10 Downing Street as their addresses.

As Monzo expanded rapidly, it did not maintain sufficient safeguards to prevent financial crime risks, the FCA said in a statement issued Tuesday. After a 2020 review, the FCA imposed restrictions preventing Monzo from opening accounts for high-risk customers. However, from August 2020 to June 2022, Monzo repeatedly breached this requirement, onboarding over 34,000 high-risk customers.

Therese Chambers, FCA joint executive director of enforcement and market oversight, said, “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. This illustrates how lacking Monzo’s financial crime controls were.”

Monzo’s CEO TS Anil acknowledged the issues but stressed that the problems have been resolved and substantial improvements have been made. Monzo remains committed to fighting financial crime.

Launched in 2015, Monzo is among the fastest-growing fintech firms in the UK. Yet, regulatory scrutiny has increased over financial crime controls in fintechs; Starling Bank was fined £29 million in 2024 for similar failings in anti-money laundering and sanctions screening systems.

Despite the fine, Monzo reported strong financial performance in its latest results, with pretax profit rising to £60.5 million for the year ending March 31, 2025, compared to £13.9 million the previous year. CEO Anil said it was too early to discuss a potential IPO.

EU Firm on AI Rules Timeline Despite Industry Calls for Delay

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The European Commission reaffirmed on Friday that it will adhere to the legal timeline for implementing the European Union’s groundbreaking Artificial Intelligence Act, rejecting recent appeals from major tech companies and some member states to postpone the rollout.

Key Points:

  • Major tech players including Alphabet (Google), Meta (Facebook), as well as European firms like Mistral and ASML, had urged the Commission to delay the AI Act by several years.

  • Commission spokesperson Thomas Regnier made clear at a press conference:

    • No pause, no grace period, and no stop-the-clock on the AI Act timeline.

    • Initial provisions took effect in February 2024.

    • Rules for general purpose AI models will begin enforcement in August 2024.

    • Requirements for high-risk AI models will start in August 2026.

  • The Commission indicated plans to simplify digital rules later this year, potentially reducing reporting obligations for smaller companies.

  • Concerns from companies center on the compliance costs and strict regulations, as the AI Act seeks to regulate a technology critical to sectors dominated by the US and China.

EU Defends Digital Markets Act, Insists It’s Not Targeting U.S. Tech Giants

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European Union officials have rejected accusations that their new Digital Markets Act (DMA) is aimed at U.S. tech giants. In a joint letter to U.S. congressmen Jim Jordan and Scott Fitzgerald, EU antitrust chief Teresa Ribera and EU tech chief Henna Virkkunnen emphasized that the DMA is designed to keep digital markets open and applies to all companies meeting the criteria for being considered “gatekeepers,” regardless of their headquarters.

Ribera and Virkkunnen responded to concerns raised by U.S. lawmakers about the potential impact of the DMA on U.S. firms. The letter, dated March 6, clarified that the law does not specifically target U.S. companies, but instead applies to any firm that fits the established gatekeeper definition in the EU.

The EU officials also defended the DMA against criticism that it could stifle innovation. They argued that the act aims to prevent unfair practices by dominant players, thus fostering a more open and competitive digital market that will allow new players to emerge and innovate. Ribera and Virkkunnen highlighted that similar concerns over monopolistic behavior had prompted antitrust investigations and legal actions against companies like Google, Amazon, Apple, and Meta in the U.S. under the Trump administration and beyond.

In response to claims that EU fines on American tech firms resemble a European tax, the EU officials emphasized that the primary goal of enforcement is to ensure compliance with the law, not to impose punitive measures. They pointed out that sanctions, which are a standard feature of both EU and U.S. regulations, are essential for ensuring effective enforcement.