HSBC slapped with £64m FCA fine for money laundering failings


HSBC slapped with £64m fine by Britain’s financial watchdog for money laundering failings

  • FCA finds multiple failings in the bank’s anti-money laundering processes
  • It is the second money laundering fine dolled out to a bank in two months
  • HSBC avoided a larger fine for not disputing the findings, the FCA said 

HSBC has been fined £63.95million by the Financial Conduct Authority, which found multiple failings in the bank’s anti-money laundering processes.

Three key parts of HSBC’s transaction monitoring systems in the UK showed serious weaknesses over a period of eight years to 31 March 2018, the FCA said on Friday.

HSBC was found to have made a string of failings, including inadequate monitoring of money laundering and terrorist financing scenarios until 2014, and poor risk assessment of ‘new scenarios’ after 2016.

It is the second fine handed out to a high street bank for money laundering in a week, with the FCA having slapped Natwest with a £264.8million penalty after multiple failures emerged including the acceptance of dustbin bags of cash arriving at 50 branches across the country. 

HSBC is the second bank to be fined on money laundering grounds in just two months

HSBC is the second bank to be fined on money laundering grounds in just two months 

The bank was also found to have had inappropriate testing and did not check the accuracy and completeness of data in monitoring systems.

Mark Steward, executive director at the FCA, said: ‘These failings are unacceptable and exposed the bank and community to avoidable risks, especially as the remediation took such a long time.’

HSBC did not dispute the findings, resulting in its penalty being reduced from £91million.

The fine comes amid a renewed crackdown by the regulator on money laundering failures.

Natwest’s fine was revealed this week after pleading guilty to charges in October for failing to prevent £365million of money allegedly being laundered by a single customer.

The FCA said Bradford jeweller Fowler Oldfield – which was liquidated in a police raid in 2016 – deposited £365 million with the bank over a five-year-period, including £264 million in cash. 

It marked the FCA’s first major win on money laundering and a new phase in the watchdog’s charge against shoddy practices and weak links in the City.

HSBC has already been fined overseas for money laundering failures in recent years, having agreed to pay a £1.2billion fine to regulators in the US in 2012 after admitting it had served as a middleman for Mexican drug cartels.

The bank has had to tighten up its money-laundering controls globally after a string of past scandals.

Writing in the Mail on Sunday recently, former business secretary Vince Cable called on high street banks to do more to combat fraudsters.

Commenting on the bank’s most recent money laundering fine, an HSBC spokesperson said: ‘We are pleased to resolve this matter, which relates to HSBC’s legacy anti-money laundering systems and controls in the UK.

‘HSBC is deeply committed to combating financial crime and protecting the integrity of the global financial system.’



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