Market News
Monzo lender hits pause on new customers amid investigation - THE TELEGRAPH UK
BY Matthew Field
A lender providing savings products to Monzo users has halted offers for new customers after Monzo was hit by a Financial Conduct Authority investigation.
Oaknorth, which is among lenders that have provided £1bn in savings to Monzo users, said it had paused offerings via the digital bank amid a risk review and expected to relaunch its products.
The lender hit pause after Monzo revealed last month that it was the subject of an investigation by regulators into concerns over money laundering checks.
On Monzo’s “savings marketplace” website, three of its five lending partners are unavailable. Oaknorth halted its offering while it conducted due diligence amid the watchdog's investigation, The Times first reported.
A source said the other lenders paused new offerings before the FCA investigation began in May this year. The offerings are shown on its website to be “temporarily unavailable” to new customers.
It is understood Oaknorth paused its lending on Wednesday and could restart its offering as soon as next week.
Oaknorth said: “It is standard practice for us to conduct risk-based reviews with all partners, including when new information comes to light. We are in very advanced stages of completing that review and expect to launch our products within Monzo’s marketplace soon.
“We have been in partnership with Monzo since spring 2019 and very much value this relationship.”
A Monzo spokesman said: “Across the industry, adding or amending products and offerings is a completely normal part of running a marketplace model. This very short-term pause doesn’t affect existing customers using OakNorth and any suggestion that it is permanent or that other historical changes are related to anything other than business-as-usual activities, is entirely inaccurate.”
Monzo warned in its annual report last month that it had been informed by the FCA of an investigation into civil and criminal liability over potential money-laundering breaches between 2018 and April this year.
The challenger bank has made efforts to establish a lending presence, offering products from other banks through its app and online. Its 4m users have about £1.3bn saved through its app.
In the year to February, Monzo reported losses of £130m on revenues of £66m. It warned that if the business failed to secure new investment it would “cast doubt” on its ability to continue as a going concern.
