FCA investigating Monzo as challenger reports £115m yearly loss
The UK’s Financial Conduct Authority (FCA) is investigating digital bank Monzo over potential breaches of money laundering laws, as the challenger reports steady losses for the last year.
Monzo has kept its losses steady while increasing revenue
Monzo disclosed the ongoing investigation in its annual report, which also revealed a loss of £115 million.
The figure is equivalent to those the bank suffered last year, while revenues have doubled.
The bank reported 200,000 paid subscribers, and that an extra one million new customers joined Monzo over the past 12 months. It says deposits are up 124%, from £1.4 billion to £3.1 billion.
The FCA told Monzo of its formal investigation in May 2021, the same month the regulator sent a notice to the industry at large highlighting the need for improved AML practices.
Monzo writes: “The prevention of financial crime is an issue that affects the entire banking industry and one which Monzo is taking extremely seriously.
“Over the past year we have made major investments in our controls in this area as a priority and will continue to invest heavily in this part of the business.”
On the losses it has incurred, the challenger adds: “We have losses today and expect to have more in the short term.
“Which is why we plan to raise the capital we need to support the business and meet our capital requirements in FY2022.”
The challenger bank raised £200 million between 2020 and 2021, and achieved a valuation of £1.2 billion.
Chief executive, T.S Anil, says more fundraising can be expected in the next few months, and added that the bank is fielding “a significant amount of inbound interest” from new and existing backers.
