UK watchdog fines HSBC $63.9m

The Financial Conduct Authority (FCA) has fined HSBC £63.9 million for failings in its anti-money laundering processes.

The regulator said that the bank used automated processes to monitor hundreds of millions of transactions a month to identify possible financial crime.

However, the FCA found that three key parts of HSBC’s transaction monitoring systems showed “serious weaknesses” over a period of eight years from 31 March 2010 to 31 March 2018.

According to the authority, HSBC 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, appropriately test and update the parameters within the systems that were used to determine whether a transaction was indicative of potentially suspicious activity, and 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 per cent discount. Otherwise, the FCA would have imposed a financial 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.

“HSBC’s transaction monitoring systems were not effective for a prolonged period despite the issue being highlighted on numerous occasions,” said Mark Steward, executive director of enforcement and market oversight, FCA. “These failings are unacceptable and exposed the bank and community to avoidable risks, especially as the remediation took such a long time. HSBC continued their remediation to address these weaknesses after the relevant period.”

The FCA’s action relates to HSBC’s compliance with UK laws and the matters addressed in our Notice were not part of the action taken by the U.S Department of Justice in 2012.

    Share Story:

Recent Stories


New Business Frontiers
FStech’s Mark Evans discusses the future of financial services with Liu Jianning of Huawei, covering the limitations that current thinking can impose, how financial institutions can embrace technology to be both agile and resilient, and making space for the organisation to focus on the job of creating innovative business models and on delivering business value for their customers.

The Future of Intelligent Finance
FStech Group Editor Mark Evans sits down with Jason Cao, President of Global Financial Services Business Unit, Enterprise BG at Huawei ahead of its Intelligent Finance Summit which was held on 3rd and 4th of June in Shanghai. This Q&A delves into key trends in digital transformation of the financial services industry as well as a look at how data, robotic infrastructure, intelligent storage and innovative technologies are shaping the future for FSIs.

Cracking down on fraud
In this webinar a panel of expert speakers explored the ways in which high-volume PSPs and FinTechs are preventing fraud while providing a seamless customer experience.