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Home News Monzo breached the bank's VREQ and had 'inadequate Anti-Financial Crime (AFC) systems and controls'
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Monzo breached the bank's VREQ and had 'inadequate Anti-Financial Crime (AFC) systems and controls'

10/07/2025

The FCA has fined Monzo for 'inadequate anti-financial crime systems and controls' dating back to 2018. Failures were identified across the entire financial control framework, including:

  • Customer risk assessment;
  • PEP identification and treatment;
  • Transaction monitoring;
  • Customer due diligence; and
  • Enhanced due diligence.

 A portion of the fine also relates to breaches of the bank's VREQ, as the inadequate control framework, coupled with poor oversight and governance, resulted in:

  • The bank onboarding thousands of high-risk customers during the VREQ period.
  • Something they were not permitted to do.

What is a VREQ?

  • A VREQ is a Voluntary Requirement that a firm agrees to have imposed on itself by the Financial Conduct Authority (FCA).
  • It is a regulatory tool used to manage risk and ensure compliance without the need for immediate enforcement action.

Key Details:

  • Firms voluntarily agree to have a requirement, direction, or limitation placed on them;
  • These are legally binding once agreed and are typically published on the Financial Services Register; and
  • VREQs are used to:
    • Prevent firms from taking on new customers;
    • Require firms to retain assets;
    • Restrict certain regulated activities; and
    • This is distinct from OIREQs (Own-Initiative Requirements), which the FCA imposes without the firm’s agreement.

Legal Basis:

  • VREQs are grounded in Section 55L of the Financial Services and Markets Act 2000 (FSMA).
  • The FCA may also use Section 55J to vary or cancel permissions, and Schedule 6A for non-compliant firms.

References

[1] FCA updates to requirements, limitations and directions https://www.fca.org.uk/news/news-stories/fca-updates-requirements-limitations-directions

[2] SUP 7.2 The FCA’s powers to set individual requirements and limitations ... www.handbook.fca.org.uk/handbook/SUP/7/2.html

UNITED KINGDOM DIGITAL TRUST FINES

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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.  

news disclaimer -

As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.