Combating financial crime

Preventing financial crime

HSBC adheres to a number of international standards to help prevent financial crime. We've also developed our own policies and programmes to protect our customers and employees from becoming victims of financial crime.

Anti-money laundering

HSBC's group-wide policy on deterring money laundering and terrorist financing is based on internationally recognised standards issued by the Financial Action Task Force on Money Laundering. We continue to make significant investments in anti-money laundering systems, including automated systems and other processes to monitor transactions and report suspicious activity to the authorities; the screening of payments and customers against terrorist and sanctions lists issued by the authorities; and training programmes for all relevant staff. HSBC is a founder member of the Wolfsberg Group of Banks (www.wolfsberg-principles.com), which aims to develop anti-money laundering and anti-terrorism standards for financial services companies. We have adopted all of the Wolfsberg Standards as group policy.

Countering fraud

In 2005, we launched a global fraud strategy which merged all anti-fraud activity across the Group under a central functional management, which has ensured consistency and efficiency in fraud prevention, detection and investigation.

We have also invested in an ambitious programme of anti-fraud technology, including a standard platform for customer monitoring across all channels globally. This is based on a commercial system developed jointly with Software Company SAS, beginning with plastic card monitoring and expanding and, in time, to include non-plastic and e-banking channels. Requiring a significant investment of capital and internal resources, the anti-fraud programme will place HSBC ahead of its peers in fraud detection capability. The card fraud team in the US will be the first to implement the system, with test results showing a marked improvement in fraud detection compared with previous years.

E-crime

Increased customer awareness is essential in the battle against fraud. HSBC continues to invest in initiatives to help customers understand the risks and avoid becoming victims. For example, we publish information on our primary web site, www.hsbc.com/onlinesecurity, and on our local language web sites around the world concerning the measures taken by HSBC to protect customers from e-crime, as well as advice on the steps customers should take to protect themselves. HSBC is also involved with channel-specific initiatives, such as the ‘Get safe online' campaign in the UK, a partnership between government departments and the private sector designed to raise public awareness of the risks of doing business online, and how they can be mitigated.

Internally, we provide anti-fraud training programmes to protect our employees against fraud and equip them with the tools to offer fraud prevention advice to our customers.

ATMS, chip and PIN

HSBC also engages with external partners to identify fraud threats early, enabling us to take timely action to minimise their impact. HSBC ensures that ATMs are located in secure, well-lit areas, often equipped with surveillance cameras. On-screen security tips are common in most branches and security staff conduct routine checks on ATM locations. In the UK and the Middle East, our ATMs are equipped to thwart card skimmers from illegally reading customer card numbers after a transaction. This technology is being considered in other locations across the Group. Complementing this, we continue to collaborate with peer organisations, industry bodies and local regulators to introduce new anti-fraud solutions, the most recent of which was the successful implementation of 'chip and PIN' in the UK. In this way, we are able to keep abreast of emerging risks and share information, enabling the Group to counter the fraud threats of the future.

Anti-bribery and anti-corruption

Our long-established policy on bribery and corruption was updated in January 2005 with the assistance of Transparency International. HSBC's Business Principles for Countering Bribery give practical effect to such initiatives as the Organisation of Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery, and the anti-bribery provisions of the revised OECD Guidelines for Multinationals, and Principle 10 of the United Nations Global Compact. We also subscribe to the Wolfsberg Statement on Corruption. HSBC's policy applies both to the bribery of public officials, and commercial transactions and relationships, providing a minimum Group-wide standard consistent with our business values: the highest personal standards of integrity at all levels; commitment to truth and fair dealing; and commitment to complying with the spirit and the letter of all laws and regulations in HSBC's areas of operations.