British online bank Monzo has been fined over £21 million by the Financial Conduct Authority (FCA) after they allowed customers to register accounts to "implausible" addresses such as Buckingham Palace and No 10 Downing Street.

The UK’s financial watchdog said the fine related to failures regarding anti-financial crime measures dating back to between October 2018 and August 2020.

The FCA pointed out cases where the digital bank onboarded customers based on limited or invalid information.

For example, it found customers were allowed to register bank accounts using addresses such as PO Boxes, foreign addresses with UK postcodes, or well-known London landmarks.

It counted "Buckingham Palace" and "10 Downing Street" as addresses provided by fraudsters applying for an account, as well Monzo’s own headquarters.

Other instances of weak onboarding controls included two customers opening multiple accounts without Monzo being aware, despite having them previously closed as a result of financial crime concerns.

The news comes just weeks after the digital bank revealed surging annual profits as a result of attracting new customers and growing income from its paid subscription plans.

The company reported a pre-tax profit of £60.5 million for the year to the end of March - more than four-fold the £13.9 million generated the prior year.

The FCA's investigation also found that Monzo repeatedly breached a requirement preventing it from opening accounts for more than 34,000 high-risk customers between August 2020 and June 2022.

They also stated that Monzo’s financial crime systems and controls "failed to keep pace" with its rapid growth in customer numbers in recent years, which ballooned from 600,000 in 2018 to more than 5.8 million in 2022.

Therese Chambers, FCA joint executive director of enforcement and market oversight, said Monzo’s actions "fell far short of what we and society expect".

The FCA said the fine of £21.1 million had been discounted from £30.1 million after Monzo agreed to resolve the issues.

Monzo said the group had since made "substantial improvements" in its systems and controls.