Second Bank of England fined for bringing…

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HSBC owes nearly $85 million due to an inadequate risk assessment.

Britain’s largest investment bank HSBC will pay a £63.9 million (~$85 million) fine for mis-monitoring of suspicious transactions. This was announced by the UK’s Financial Conduct Authority (FCA) in a press release.

  • Regulators found weaknesses in three key areas of the bank’s transaction monitoring system, the FCA said. According to the ministry’s conclusion, HSBC was unable to adequately assess risks under the money laundering and terrorist financing scenarios until 2014, and monitor in a timely manner for new scenarios. It was found that the bank did not update the parameters to classify the transaction as suspicious.
  • It was also found that HSBC did not verify the accuracy and completeness of the data in the monitoring system. As a result, the bank either misanalyzed “millions of transactions worth billions of pounds” or “didn’t do it at all,” the FCA said.
  • Violations were found in the bank’s activities from March 31, 2010 to March 31, 2018. At the end of this period, the bank served 13.6 million active customers, FCA reported.

“This error is unacceptable and exposes banks and the public to avoidable risk, especially as repairs take time,” said FCA chief Mark Steward.

  • HSBC did not dispute the FCA findings. Thanks to this, the amount of the fine was reduced by 30%, the regulator said. The original financial sanction was £91.3 million.
  • HSBC has taken “large-scale action” to address deficiencies in its anti-money laundering process, the FCA said.

“We are pleased to address this issue, which demonstrates HSBC’s commitment to countering money laundering and terrorist financing,” an HSBC spokesperson told Reuters.

  • Against this backdrop, HSBC’s share price on the New York Stock Exchange increased by 0.24%.

Pre-market data. Source: MarketWatch.

We will recall, this week a London court ruled to fine British bank National Westminster (NatWest) £264.8 million ($350.28 million). NatWest pleaded guilty to money laundering in October this year. The bank committed “a number of failures in its system to track and verify suspicious transactions,” the regulator told the court.

British neobank Monzo is also suspected by the FCA for not complying with anti-money laundering laws.

Read also: The Russian bank has started testing its anti-money laundering platform.

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