HSBC fined over money laundering breach
HSBC has been fined £63.9 million for “unacceptable” failings in its anti-money laundering processes.
The bank used automated processes to monitor hundreds of millions of transactions a month to identify possible financial crime.
But the Financial Conduct Authority found serious weaknesses in three key parts of HSBC’s transaction monitoring systems between 31 March 2010 to 31 March 2018.
In particular, the bank failed to consider whether the scenarios used to identify indicators of money laundering or terrorist financing covered relevant risks until 2014 and carry out timely risk assessments for new scenarios after 2016.
It also did not appropriately test and update the parameters within the systems that were used to determine whether a transaction was indicative of potentially suspicious activity.
Finally, it failed to check the accuracy and completeness of the data being fed into, and contained within, monitoring systems.
HSBC did not dispute the FCA’s findings and agreed to settle at the earliest possible opportunity, which meant it qualified for a 30% discount. It therefore avoided a steeper penalty of £91,352,600.
HSBC has undertaken a large-scale remediation programme into its anti-money laundering processes, which was supervised by the FCA.