HSBC GTRF introduces “industry-leading” financial crime detection systems

HSBC’s Global Trade and Receivables Finance (GTRF) business has deployed an industry-leading anti-money laundering (AML) system and an automated sanctions checking system as part of its ongoing efforts to improve financial crime detection.

In what’s an industry first, the new customer surveillance system uses Big Data, advanced analytics and automated ‘contextual monitoring’ to detect and disrupt financial crime in international trade. The contextual approach, developed with Quantexa, builds on HSBC’s expertise in network analytics to enable the bank to better identify suspicious patterns and potential criminal networks by combining customer and counter-party trade information, transactional data and external insights.

It’s currently active in the UK and Hong Kong and being rolled out across HSBC’s global network.

Adrian Rigby, COO of GTRF at HSBC, said: “This new capability marks a significant milestone in the bank’s intelligence-led approach to detecting financial crime. The introduction of the first automated AML capability in the Trade Finance industry enables HSBC to more effectively concentrate its resources on genuine financial crime risk within our business and make trade safer for customers and society.”

Bank data and external data

The new system combines bank data and external data, such as company ownership information, to identify links between counter-parties and transactions and map out networks. It automatically screens all trade finance transactions against over 50 different scenarios that indicate signs of money laundering, such as associated networks and payment patterns. This is more than double the average number of checks against indicators at a transactional level. It also provides investigators with an enhanced ability to analyse counter-party activities and relationships to better identify potential financial crime.

Vishal Marria, CEO of Quantexa, added: “The solution built with the Quantexa platform uses billions of data points to provide an entity resolution and network intelligence framework which references over 40 billion financial transactions. Using this technology, customer activities can be continuously assessed and scored for risk. This level of contextual monitoring improves accuracy and decision-making, while providing insight into data relationships never before possible.”

As the world’s largest trade finance bank, HSBC screens over 5.8 million trade transactions each year for signs of money laundering and other financial crime. One of the key challenges in detecting financial crime is establishing where people or companies are acting together to move money around the globe. Now, if there are concerns about the activities of a counter-party, a financial crime investigator can rapidly build a detailed picture of the links and transactions within a customer’s global network and identify previously unknown details.

First line sanctions checking

Coinciding with the new AML surveillance launch, HSBC has automated first line sanctions checking using advanced algorithms and machine learning technology. Automated sanctions checking is now live in India and will be deployed in 41 markets by year end.

The automated solution, developed in-house, produces an instant response. By removing manual checks it reduces the processing time for each search and significantly eliminates false positives. Since HSBC initiates around one million sanctions screening submissions per month, this significantly improves the bank’s control environment as well as improving transaction speed for clients.

Collectively, these innovations will help HSBC to fight financial crime through accurately identifying criminal activity and networks that might not have been possible previously, ultimately helping to protect customers and their communities from financial crime.

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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