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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.

NatWest Partners with OpenAI to Enhance Digital Banking Experience

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NatWest has teamed up with OpenAI in a groundbreaking collaboration aimed at enhancing its digital assistants and customer support services through advanced artificial intelligence. This marks the first such partnership between a UK-based bank and OpenAI. The collaboration is part of NatWest’s strategy to improve customer experience, reduce operational costs, and combat financial fraud in the banking sector.

Under the agreement, NatWest will gain access to OpenAI’s full range of products, as well as early access to upcoming AI tools and dedicated consultancy. One of the primary areas of focus is improving NatWest’s customer-facing chatbot, Cora, and its internal virtual assistant, AskArchie. The bank hopes to leverage AI to encourage customers to report suspected fraud through Cora, reducing the heavy reliance on phone calls, and speeding up the process of securing vulnerable accounts.

In the first half of 2024 alone, UK payment fraud amounted to over £570 million ($740 million), with scammers finding increasingly sophisticated ways to trap victims. By enhancing Cora’s fraud reporting capabilities, NatWest aims to improve response times and allow call handlers to focus on other customer needs.

The bank also envisions that AI-powered digital assistants will help customers better manage their finances, ultimately contributing to more informed financial decisions. According to NatWest, the introduction of generative AI into Cora has led to a 150% increase in customer satisfaction and reduced the need for human intervention in many cases.

With around 80% of its retail customers using digital banking exclusively, NatWest sees continuous innovation in AI-driven services as a key part of its future strategy.