Monzo: Rebuilding financial crime systems in a digital bank

Monzo grew from around 590,000 customers in February 2018 into one of the United Kingdom's largest digital banks, reaching around four million customers by late 2020, on a product built to remove friction so that an account could be opened in minutes. To keep onboarding fast, the bank deliberately gathered limited information about customers and relied instead on later transaction monitoring to manage financial crime risk. As the bank scaled, that trade failed, because monitoring cannot judge whether activity is suspicious without a baseline of expected behaviour that was never captured. By late 2020, an independent skilled person had reported serious deficiencies across the bank's risk assessment, due diligence, and transaction monitoring systems, and a regulatory requirement restricted the onboarding of higher risk customers while the framework was remediated. The case places the reader with chief executive TS Anil, newly in post as the firm moved beyond its founder led era, at the moment remediation could no longer be deferred. Anil must decide how to rebuild the financial crime information systems architecture, in what sequence, with which technology, and under what governance, while a restriction constrains the growth the firm was built to pursue.