Monzo is being investigated over alleged breaches of money laundering rules.
The digital bank was informed about the probe by City Watchdog, the Financial Conduct Authority (FCA), in May 2020, an annual report revealed yesterday.
Monzo said the investigation was looking at ‘our compliance with financial crime regulation’.
Probe: Monzo said the investigation was looking at ‘our compliance with financial crime regulation’
‘We’re co-operating with them, but we expect it to take time to resolve,’ the bank added.
It warned the probe could ‘have a material, negative impact on our financial position’ but said it was not clear what the outcome would be yet.
The move by the FCA comes as the regulator is taking a tougher approach to enforcing financial crime laws. The rise of digital banks, which typically allow customers to open accounts without visiting a physical branch, has led to fears over criminal abuse in some cases.
Gangs have reportedly convinced young people to hand over ‘clean’ accounts with no associations with fraud to use as conduits to withdraw dirty money.
Monzo said yesterday the FCA’s probe into its practices would look into potential criminal and civil charges.
A spokesman said: ‘The prevention of financial crime is an issue that affects the entire banking industry and one which Monzo is taking extremely seriously.’
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