FCA fines HSBC £64m for failings in its AML processes
Banking giant HSBC has been fined £63.9 million by the UK’s Financial Conduct Authority (FCA) for failings in its anti-money laundering (AML) processes.
The FCA claims HSBC’s transaction monitoring systems showed “serious weaknesses” over a period of eight years from March 2010 to March 2018.
The regulator says HSBC did not dispute its findings and agreed to settle “at the earliest possible opportunity”.
As a result, the bank’s total fine was discounted by 30% from £91,352,600 down to £63,946,800.
In particular, the FCA says 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”.
The regulator adds the bank failed to test and update fraud detection systems and check the accuracy of data being fed into monitoring systems.
HSBC has undertaken a large-scale remediation programme into its anti-money laundering processes, which was supervised by the FCA.
FCA executive director of enforcement and market oversight Mark Steward says 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 month, the FCA fined NatWest £264.8 million for breaching money laundering regulations.
The case related to the failure to properly monitor the accounts of a UK incorporated customer between 2012 and 2016.