Monzo faced a £21m fine due to insufficient cyber security measures that allowed customer verification failures. The UK's Financial Conduct Authority found the bank lacked proper systems to assess risks and identify fraud between October 2018 and August 2020. This failure resulted in high-risk customers using implausible details to create accounts and highlighted vulnerabilities that can be exploited for financial crime. Incidents of financial fraud are increasing, underlining the need for better cyber hygiene in digital banking.
The UK's Financial Conduct Authority (FCA) recently determined that, between October 2018 and August 2020, the challenger bank lacked sufficient "anti-financial crime systems and controls" for signing up new customers, assessing any risks they posed and identifying fraudulent transactions.
These failings by Monzo come as financial crime continues to increase in volume and sophistication. According to UK Finance figures, there were 3.31 million financial fraud cases in 2024, and £1.17bn was lost as a result.
Jake Moore stated that the bank made "serious internal errors" regarding its cyber security posture, such as failing to follow "Know Your Customer" principles.
Experts have emphasized the importance of good cyber hygiene, especially given that challenger banks do not always prioritize cyber security and data privacy.
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