We have taken a number of steps to tackle financial crime. Since 2011, we have reduced the number of countries in which we operate and put in place far greater central control over our operations, including over financial crime compliance.
As part of de-risking our business we have ended our relationship with customers that we consider too risky and stopped selling certain types of products.
Beginning in 2012, we designed and implemented across all our operations consistent global policies on anti-money laundering and sanctions, with standards often extending well beyond local laws. And we have significantly strengthened the bank’s Financial Crime Risk function, hiring experts in their field to provide management oversight with independent supervision from a dedicated Board committee.
Putting in place defences
From 2015 we began rolling out a number of major IT systems including for customer due diligence (CDD) and monitoring and screening.
Our CDD system, which was in place across all countries and business lines by the end of 2016, means new customers are assessed for financial crime risk when they join HSBC and at regular periods, based on their risk profile. Over time we will assess all existing customers.
We have put in place a robust three lines of defence model. Most employees are in the first line of defence, spotting, reporting and managing financial crime. They are supported by the Financial Crime Risk function as the second line to provide oversight and challenge. The third line is Internal Audit, which act independently to assure the effectiveness of our controls and risk management.
Early on we recognised the importance of training, rolling out financial crime learning to all employees, repeated annually, and driving awareness through regular employee campaigns. We focused on creating the right culture, with 200,000 employees taking part in our day-long face-to-face training on values and speaking up and a further 30,000 managers undergoing an intensive two-day course.
Ensuring our defences operate effectively
In 2017 we are focused on completing the job of putting in place the systems and processes, and assessing all countries to ensure that our controls operate effectively everywhere.
Our journey to fight financial crime will never end. We will continue to work to fine tune our systems and to ensure that our improvements are fully integrated into our day-to-day risk management practices.
Criminals are constantly adapting their techniques, so we will continually adapt how we manage financial crime risk to keep them out of the banking system that we all depend on.