Neil Williams of business crime solicitors Rahman Ravelli understands the bank's motivation for taking such an approach.
HSBC has revealed an anti-money laundering (AML) surveillance system and automated sanctions checking tool for its global trade and receivables finance business.
Developed with fintech firm Quantexa, the AML system uses data, advanced analytics and automated monitoring to detect and intercept financial crime in international trade. It does this by combining customer and counterparty trade information, transaction data and other intelligence such as company ownership details.
The system is now running in the UK and Hong Kong and is set to be introduced across HSBC's whole network. HSBC, which screens more than 5.8M trade transactions a year for financial crime, hopes its new technology will help it reduce the potential for money laundering by identifying criminal activity and networks that might otherwise have gone undetected.
HSBC says the system monitors all trade finance transactions against more than 50 different scenarios that could indicate money laundering and uses billions of data points to establish possible relationships.
HSBC's automated sanctions checking is now live in India and will be introduced in 41 markets before next year. It removes the need for basic manual checks and reduces the processing time for searches, allowing investigators to focus on genuine risks. With research from financial crime compliance software provider Accuity showing an increased number of sanctions issued over the last year, banks' trade finance operations are facing increasing complexity.
While trading on a global scale can bring rewards it also brings risk. With the introduction of its new AML surveillance system, HSBC is looking to tackle head-on the issues raised by trading worldwide.
With the volume of data that needs to be processed, the newly-developed monitoring system should see a shift from reactive monitoring to a more pro-active real-time approach; which could prove beneficial in the battle against financial crime. Given the penalties which can follow for breaching AML compliance and global sanctions, HSBC must be hoping that its new approach will ensure that it does not face any headline-grabbing fines in the future.
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