UK’s Financial Conduct Authority (FCA) has levied a fine of £63,946,800 ($84,707,065) on HSBC Bank plc (HSBC) for AML failings. HSBC used automated transaction monitoring systems to identify possible financial crime. However, the FCA found that these systems had critical weaknesses during 2010-18.
Until 2014, HSBC failed to check if the scenarios used to identify ML/TF indicators covered all relevant risks. It also failed to conduct timely risk assessments for new scenarios after 2016. Moreover, the bank did not appropriately test and update the parameters used to identify suspicious activity. Finally, it failed to verify the data entered into (or stored in) the transaction monitoring systems.
Since HSBC agreed to settle the case without dispute, it qualified for a 30% discount on the original penalty of £91,352,600 ($121,010,130). In addition to the penalty, HSBC has undertaken a large-scale, FCA-supervised remediation program.
Source: Financial Conduct Authority, UK