Monzo losses grow as it faces investigation by the FCA for financial crime breaches
The FCA has launched a formal investigation into Monzo’s anti-money laundering practices, which could carry both civil and criminal liability.
After a year of turmoil, it looks like Monzo is not quite out of the woods just yet.
The digital bank, which published its annual report earlier this morning, saw losses increase to £129.7m for the year ending 28 February 2021, up from £113.8m in the same period in 2020.
Last year’s report shocked the world of fintech when Monzo revealed there were “material uncertainties that cast doubt on our ability to continue as a going concern,” and the 2021 report is no different.
Monzo’s directors continue to recognise that there are still ongoing “material uncertainties” over the bank’s ability to operate, with a further kick in the teeth coming from the Financial Conduct Authority (FCA).
The report stated that on 7 May 2021, the FCA informed Monzo that it has “started an investigation into our compliance with financial crime regulation,” after initially telling the bank to appoint someone internally to oversee the initial review into its financial crime practices in August 2020.
Monzo’s apparent breaches date all the way back to 1 October 2018 and the FCA is looking into the issues as both a potential civil and criminal case, with Monzo saying that the investigation “could have a material negative impact on our financial position.”
Although, it’s not all doom and gloom.
Despite the rising losses, Monzo also saw its customer deposits increase by over £1.7bn to more than £3.1bn in 2021 and the bank’s revenue also increased from £67m in 2020 to £79m in 2021.
Monzo also added more than a million customers over the last year, now counting more than 5m users, has amassed over 770,000 business customers and a further 210,000 Monzo Plus and Monzo Premium customers.
Those all-important paying customers now account for 25 per cent of Monzo’s revenue.