Technology

Technology plays a crucial role in our fight against financial crime. This is why we are investing heavily to create integrated systems that help keep criminals out of banking.

Over recent years, we have substantially developed our ability to detect financial crime, investing in upgraded systems and technology infrastructure.

Each month, on average, we monitor approximately 900 million transactions for signs of financial crime. In 2024, we filed over 113,000 suspicious activity reports to law enforcement and regulatory authorities where we identified potential financial crime. We continue to refine our approach.

Working with external partners, we have incorporated machine learning and other advanced analytics techniques that, to the extent permitted by law, bring together customer and transaction data from across the Group and external sources – helping us detect and manage financial crime risk more effectively.

We are focusing our improvements on five areas:

• Customer Due Diligence – understanding our customers better and assessing their financial crime risk
• Screening – checking ‘live’ customer transactions against relevant watchlists and indicators to spot signs of financial crime
• Monitoring – looking for unusual activity in customer accounts by understanding typical patterns of customer behaviour
• Case management – enabling effective investigations of unusual activity
• Exit management – making sure we have a consistent and auditable approach to end our relationship with customers HSBC does not want to do business with

HSBC constantly strives to improve the way we detect financial crime and explores technologies that help us build on existing capabilities. Fighting financial crime is a key area that can benefit from innovation and we work with, and invest in, a number of financial technology (fintech) firms that can help us achieve this.

We have significantly evolved our approach to financial crime risk management by using our size and scale to leverage more of the data available to us and to apply advanced analytics and artificial intelligence.

This is helping us overcome some of the inherent limitations in the existing industry-wide approach to financial crime risk management, which uses a small amount of available information and results in a high number of false alerts.

As a result, we’re becoming more effective at fighting financial crime as we become faster and more accurate at detecting suspicious activity and understanding risk. We are generating greater insight that we can use ourselves and provide to law enforcement to help keep criminals out of the financial system and minimise unintended consequences for legitimate customers. This will benefit us, our customers and society at large.

In our use of innovative technology, we are committed to maintaining a robust ethical framework.