Monzo, a prominent fintech firm, has come under scrutiny from UK regulators for multiple regulatory breaches, which are considered serious by the authorities.
- The Competition and Markets Authority (CMA) highlighted Monzo’s failure to comply with the Retail Banking Market Investigation Order 2017 in several areas.
- Key areas of non-compliance include incorrect service quality surveys and lack of clear communication on account charges and loan rates.
- Despite previous warnings, Monzo did not fully address these issues, prompting increased monitoring by the CMA.
- Monzo has acknowledged the breaches and taken steps to resolve the shortcomings without further repercussions from the CMA.
Monzo, the well-known fintech company, has been spotlighted by the UK’s Competition and Markets Authority (CMA) for a series of regulatory breaches. Described as ‘especially concerning’ by the CMA, these breaches indicate a pattern of non-compliance with the Retail Banking Market Investigation Order 2017.
The accusations against Monzo include the distribution of inaccurate surveys assessing the quality of their banking services. In addition to this, the firm failed to adequately disclose the monthly maximum charges associated with its current accounts and did not publish the representative loan rate on its business banking platform.
Compounding these issues, Monzo neglected to inform the CMA of these breaches within the required 14-day period after discovery, a critical component of regulatory compliance. This pattern of repeated infractions has been noted as particularly troubling by Colin Garland, director of markets at the CMA, necessitating closer oversight of Monzo’s activities moving forward.
In response to past regulatory warnings in February 2022, Monzo was similarly chastised for not effectively communicating the minimum charges for personal current accounts. Despite these ongoing issues, the CMA has currently decided against pursuing formal enforcement actions, respecting Monzo’s proactive response in rectifying past mistakes.
A spokesperson from Monzo explained that the company has been recognised for its efforts to amend these ‘historical issues’, which halted further action from the CMA. Monzo stresses its commitment to upholding regulatory standards and has implemented measures to prevent future lapses.
Interestingly, the scrutiny on Monzo follows closely on the heels of another major fintech player, Starling Bank, which recently faced a substantial fine for inadequacies in financial crime prevention on high-risk accounts. This environment of intensified regulatory focus may underscore the challenges faced by challenger banks in keeping pace with stringent compliance demands.
Adding a controversial layer to the scenario, Monzo’s co-founder Tom Blomfield recently took to social media, criticising regulators broadly, describing them as ‘religious zealots’. While his comments were not aimed specifically at the CMA, they echo a broader sentiment of frustration within the tech industry towards regulatory expectations.
Monzo has pledged to resolve the identified issues and ensure compliance, amidst a broader regulatory climate of increased scrutiny for fintech firms.
