Digital bank Monzo is being investigated by the Financial Conduct Authority (FCA) over potential breaches of financial crime regulations, the bank has disclosed.
The financial watchdog sent letters to several retail banks including Monzo in May, warning of failings in their anti-money laundering controls.
Monzo said it is complying fully with the FCA’s investigation.
This comes on the back of customer complaints Monzo received in 2020.
Hundreds of Monzo customers claimed they were left without access to money when their accounts were suddenly frozen during the first coronavirus lockdown in 2020, according to the Guardian.
In response to the Guardian investigation, the mobile app-based challenger bank unblocked a customer’s account and apologised, saying “we don’t always get this right”.
However, it said that in 95% of cases, it had made the right decision in freezing accounts.
An FCA spokesman told the BBC that the financial watchdog was unable to comment on ongoing investigations.