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HSBC fined £64m for money laundering failings

Emma Lunn
Written By:
Emma Lunn

The Financial Conduct Authority (FCA) has fined HSBC £63.9m for ‘deficient transaction monitoring controls’.

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

The FCA said HSBC’s measures failed to consider all relevant risks until 2014 and did not carry out timely risk assessments for new suspicious transactions until after 2016.

It also failed to 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% 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.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “HSBC’s transaction monitoring systems were not effective for a prolonged period despite the issue being highlighted on numerous occasions. 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.”

Earlier this week Natwest was fined £264.8m by the FCA for failing to comply with money laundering regulations.