Compliance failures rarely make national headlines - but the FCA’s £21 million fine against Monzo did just that, and fast. The story, which landed in July 2025, quickly took on a life of its own and dominated news feeds well beyond the fraud and AML communities. This was partly because of penalty being £21 million. But also because some details were impossible to ignore.
One widely shared detail was customers successfully onboarding with addresses like 10 Downing Street - a sign of inadequate address validation checks and tolerance for improbable data.
Although tempting to focus on the shock factor, beneath the surface is a story many in the industry will recognise all too well. One of rapid growth outpacing controls.
During the period covered by the FCA fine (2018 – 2020), it grew its customer base tenfold – from around 600,000 to over 5.8 million accounts. At the same time, it built a near-cult following of challenger bank evangelists drawn to Monzo’s new way of doing things.
With that kind of expansion, the risk of outrunning your own controls is very real.
Pressure builds quietly. Small gaps widen quickly, and before long, the systems meant to catch risk begin to let it through. Fraudsters seek out these fast moving, under strain environments quite simply because they almost always have visibility problems.
For fraud and AML leaders, the bigger question is “what signals were missed”? And most importantly post-remediation, would current controls spot threats in a similarly fast-paced, high-growth period?
From the FCA’s report, we get a sense of overwhelm at Monzo. Of course, pressure is to be expected when doing something differently and worthwhile change rarely happens in calm waters.
What matters is whether the controls – in this case, AML and fraud – that anchor you during turbulent times can hold fast under stress.
For the Monzo of 2018 to 2020, we saw signs this wasn’t the case. As noted in the FCA’s Final Notice, Monzo’s AML framework failed to monitor “key aspects of customer activity.” This included critical red flags such as unusual address data, missing verification steps, and inconsistent risk assessments.
It’s a sharp reminder of the paradox of innovation: the more you push boundaries, the more resilient your controls must be when conditions shift.
Synectics has worked with many trying to get ahead of fraud in testing conditions. The intelligence sharing, the high-context data, and real-time controls we focus on (for 160+ UK financial services organisations) are designed to prevent exactly the kind of visibility and resilience breakdowns Monzo experienced.
We do this because remediation is only ever the beginning.
Fraud does not disappear. It shifts, adapts and looks for the next weakest point.
This happened in 2024, with the mandated tightening of post-onboarding KYC requirements. In our work with leading banks, we tracked mule activity shift into low-scrutiny savings products- with a 63% increase in savings products being used to receive or move laundered funds.
But the conversation shouldn’t end there. The same pressures – scale, complexity, and customer change – are everywhere in the sector.
The challenge remains universal: how to grow quickly without compromising decision quality or risk oversight. The core of this balancing act is visibility – knowing where risk sits, how it’s shifting, and whether your controls are keeping up.
Preventing fraud and staying ahead of it depends on trusted data, adaptable controls, and collective vigilance. Because fraud isn’t static. It moves through gaps in systems, products, and between organisations.
No single organisation, however innovative, can stop it alone.
The risk it mirrors is not isolated. And the conditions that allowed Monzo to grow are still active across a sector racing to reinvent. For those banks scaling fast, investing in visibility – and the controls that allow you to act quickly on what you see – is the make or break move.
Monzo’s story could well be a mirror. And the risk it reflects is shared.
Are you facing challenges balancing fraud control with growth targets? Our team can help. Get in touch with them here.