Good conduct is key to winning and retaining our customers’ trust. Through our actions and behaviour, we aim to deliver fair outcomes for our customers and support the orderly and transparent operation of financial markets.
Conduct is a critical component of all of HSBC’s business activities. It is embedded within the Group’s strategy, business models and planning, our culture and behaviours, interaction with customers, products and services, financial markets operations, and governance and oversight processes.
We have established a global conduct framework with five pillars and 15 global conduct outcomes describing the behaviours to which we aspire. It increases our understanding of how the decisions we make affect customers and other stakeholders, helping us to strengthen our business.
Each global business and global function and HSBC Operations, Services and Technology must ensure that its procedures are designed to deliver the required global conduct outcomes.
Statement of Business Principles and Code of Conduct
The Statement of Business Principles and Code of Conduct sets out our purpose and values and the high standards of conduct that we expect.
The conduct framework
The global approach for the management of conduct has been approved by HSBC’s Group Risk Management Meeting and the Board.
Conduct is defined as ensuring we deliver fair outcomes for our customers and that we do not disrupt the orderly and transparent operation of financial markets.
Global business lines, global functions and HSBC Operations, Services and Technology are each responsible for conduct within the scope of their activities, and must develop, maintain, and be able to evidence approaches to conduct, tailored to their markets and operations, which deliver the required global conduct outcomes set out within the global approach.
The global conduct outcomes are organised around five pillars which categorise where conduct issues may crystallise. The pillars and global conduct outcomes are outlined in the table below.
|The Pillars||Global Conduct Outcomes|
The Pillars:Pillar 1: Strategy and Business Models
Global Conduct Outcomes:- Our strategy, business models, and the decisions we make deliver fair treatment of customers and do not disrupt market integrity
The Pillars:Pillar 2: Culture and Behaviours
Global Conduct Outcomes: - Our culture supports our people and empowers them to consistently do the right thing for our customers and markets in which we operate
- Our people are competent and committed to the fair treatment of customers and not disrupting the integrity of markets
- We are open to challenge, we acknowledge when things go wrong, we fix things and we learn from our mistakes
- We reward and incentivise performance, behaviours and attitudes which deliver the fair treatment of customers and uphold market integrity
The Pillars:Pillar 3: Customer
Global Conduct Outcomes:- We know our customers and understand their needs – we actively listen to them and ask the right questions
- Our products are designed to meet the different needs of our customers, to be competitive and to be understandable
- Our products and services provide a balanced exchange of value between HSBC and our customers
- Throughout our sales and servicing we are efficient, transparent and customer-focused
- We manage our products and services so that our customers’ experience is in line with the expectations we set
The Pillars:Pillar 4: Markets
Global Conduct Outcomes:- We seek to prevent and will proactively identify actions and behaviours that constitute market misconduct, and respond appropriately
- Trades are executed in a timely, clear and controlled manner ensuring that optimal execution is achieved for our customers and that HSBC trades are not manipulative
- We manage conflicts of interest and appropriately handle information to reduce the opportunity for misuse
The Pillars:Pillar 5: Governance and Oversight
Global Conduct Outcomes:- Our governance framework provides effective oversight of how we fairly treat customers and uphold market integrity
- We engage with regulatory bodies in a timely, open and transparent manner
The Board maintains oversight of conduct matters through the Group Risk Committee. Further detail on the broad range of activities we undertake to enhance conduct is provided in the Annual Reports and Accounts (PDF XXMB).
Using technology responsibly
Our approach to conduct applies to everything we do, and we continue to assess that approach in light of changes in the environment in which we operate. HSBC continues to explore and invest in new technologies, which offer tremendous potential to improve the services we provide to customers, and to manage our business more effectively. Big data technologies and artificial intelligence (AI) give us the ability to process and analyse a depth and breadth of data which was never previously possible. These new opportunities come with new responsibilities: we must ensure that big data and AI are used ethically.
That is why we developed a set of principles to help us consider and address the ethical issues that could arise. HSBC’s Principles for the Ethical Use of Big Data and AI seek to:
- Increase awareness of the ethical implications of big data and AI
- Bring uniformity and predictability to how we make decisions about the use of big data and AI across the bank globally
- Encourage colleagues to question and challenge before new uses of big data and AI are adopted
At HSBC, our values guide us in all our actions – from strategic decisions to day-to-day interactions with customers and each other.
We have a globally consistent approach to managing reputational risk.
The Board has appointed a number of committees consisting of certain Directors and co-opted non-director members.
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