FCA Fines HSBC £63.9 Million for Its AML Failure

The UK Financial Conduct Authority (FCA) announced today that it has imposed a £63.9 million fine on HSBC for failings in its anti-money laundering processes.

The financial watchdog stated that HSBC used automated processes to monitor hundreds of millions of transactions a month to identify possible financial crime. However, it found that 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.

Especially, 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;

• ​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.

In July, Fazzaco reported that CME ordered HSBC Securities (USA) Inc to a fine of $4000​, for violating Rule 576 by failing to maintain current and accurate information in the Exchange Fee System.