Britain’s banking regulator completes money laundering investigation

The UK’s financial watchdog has apparently launched an investigation into Monzo’s anti-money laundering scheme.

This is according to a position buried deep in the neobank’s annual report published on Monday (June 3), which noted that the Financial Conduct Authority (FCA) informed the company in November that it was no longer “assessing criminal liability relating to Monzo’s compliance with the Money Laundering Regulations 2017.”

The report adds that the FCA continues to investigate potential breaches of some of the regulator’s anti-money laundering (AML) rules as part of the civil case.

“We continue to cooperate with the FCA in its investigation,” Monzo said.

The report goes on to say that the FCA’s enforcement division is “continuing both its ongoing investigation and review of our historical compliance with financial crime laws; We expect this to take some time to resolve.”

The investigation was first disclosed in 2021. An FCA spokesman declined to comment on the matter when contacted by PYMNTS.

Monzo’s annual report also revealed that the bank had its first-ever profitable year.

“This has been a landmark year of record growth for Monzo,” CEO TS Anil said in a press release accompanying the report. “We have surpassed 9 million residential and 400,000 business customers, launched revolutionary new products, completed a £500 million capital raise and achieved our first year of profitability as planned.”

The capital raise was the largest in Europe in 2023, the company said, valuing Monzo at $5.2 billion.

Meanwhile, PYMNTS recently spoke with a group of compliance experts about banks’ efforts to use artificial intelligence (AI) to combat phenomena such as fraud and money laundering.

“Ultimately, fraudsters themselves are using AI to quickly and effectively create new attack vectors,” the report said. “Banks are engaged in an arms race with bad actors.”

The panelists noted that artificial intelligence has become so accessible that it can be consumed and used by almost anyone – for better or for worse.

“You can buy a synthetic identity for about $15,” said Miguel Navarro, head of customer identity verification and authentication at KeyBank.

“It’s a scary world… and we need a little bit of help from AI to help us in our businesses make sure we’re moving around safely.”