The FCA has fined HSBC Bank plc (HSBC) £63.9m for long-term failings in its anti-money laundering processes.

It’s the second large FCA fine for money laundering failings this week after NatWest was fined £264.8m earlier this week by the watchdog.

The regulator found three key parts of HSBC’s transaction monitoring systems showed “serious weaknesses” over a period of eight years from 31 March 2010 to 31 March 2018.

HSBC used automated processes to monitor hundreds of millions of transactions a month to identify possible financial crime. 

Despite this, the FCA said HSBC failed to:

• Consider whether indicators of money laundering or terrorist financing covered relevant risks until 2014 and carry out timely risk assessments for new scenarios after 2016
• Appropriately test and update system parameters used to determine whether a transaction was potentially suspicious
• Check the accuracy and completeness of the data being fed into monitoring systems

HSBC did not dispute the FCA’s findings and agreed to settle early, qualifying for a 30% discount on the fine. Without the discount the FCA would have fined HSBC £91.35m.

Since the weaknesses came to light HSBC has undertaken a large-scale shake-up of its anti-money laundering processes supervised by the FCA.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “HSBC’s transaction monitoring systems were not effective for a prolonged period despite the issue being highlighted on numerous occasions. 

“These failings are unacceptable and exposed the bank and community to avoidable risks, especially as the remediation took such a long time. HSBC continued their remediation to address these weaknesses after the relevant period.”