What do we mean by Global Standards?

HSBC is committed to setting the industry standard for detecting, deterring and protecting
against financial crime. Financial crimes include activities such as money laundering, terrorist
financing, sanctions evasion, bribery and corruption, fraud and tax evasion.
Abuse of the financial system to pursue financial crime is a global challenge facing all financial
institutions. Those seeking to abuse the financial system are constantly looking for new ways to
be one step ahead of the ability of banks and regulators to detect, deter and protect against it,
and so we need to be on our guard and constantly evolve our practices as well.
We will mitigate the risk of such crimes being committed through HSBC by adopting the highest
or most effective financial crime controls, and deploying them globally on a consistent basis. We
call these controls our Global Standards.
Why is HSBC investing so significantly in financial crime compliance?
We have a responsibility to safeguard our customers, our shareholders and society from
financial crime by ensuring that money does not get into the wrong hands and that our products
and services are not used to facilitate such activity. Its the right thing to do. We also must ensure
that the mistakes we made in the past when we failed to maintain the highest controls against
money laundering and sanctions evasion can never happen again.
The broader context for our investment is that the techniques used to commit financial crime
have become more sophisticated. Money launderers have learned how to make themselves look
like everyone else. Rather than depositing cash in branches, they attempt to move money
through the financial system via trade and securities transactions. This requires a more
sophisticated response from the financial industry as a whole in terms of people, procedures and
systems, so that we can play our part as active participants in the fight against crime.
What are HSBC's aims?
We want to do business only with customers we know and trust. Implementing Global Standards
will give us a consistent framework for making good decisions about risk, and we are doing just
that. This is good for customers and will help us build a stronger business over the longer term.
The key to success will be for everyone at HSBC to understand how to assess and manage
financial crime risk. We want to make financial crime risk management second nature, just as
credit risk is today.
How much progress has been made?
HSBC has made significant investment in financial crime compliance over recent years. This
includes educating our employees to identify the warning signs of possible financial crime such
as sudden activity on an otherwise quiet account, unnecessarily complex movements of funds,
or behaviour that does not match our understanding of the customer. We are upgrading our
automated transaction and customer monitoring systems, which spot suspicious patterns of

transactions that could indicate money laundering, and screen payment and customer
information against sanctions lists. We are also making sure we have the most up-to-date and
relevant information about our clients by performing thorough Know Your Customer (KYC)
checks, which will also permit us to properly detect and deter financial crime.
We have developed Global Standards for both anti-money laundering and sanctions, and we are
in the process of implementing them in every business, region and country where HSBC
operates. We have already reduced the overall financial crime risk that we are exposed to by
exiting certain products, customers and markets where the financial crime risks were too great to
be managed and by enhancing our controls in those markets in which we operate.
Are employees supporting this approach and changing their behaviour as a result?
We are definitely seeing changes in the culture of HSBC. Based on our internal reports of
unusual activity, we can see that our people are becoming more alert to changes in customer
behaviour that may indicate financial crime. Increasingly, they are showing the courage to speak
up and ask questions that they may not have necessarily asked before. This is a significant step
on a continuous journey: we should be able to reach a point where we dont have to talk about
Global Standards because its just a normal part of the way we do business.
What are your priorities now?
The priority is to deploy our Global Standards consistently in every part of the Group. This will
require careful coordination and a concerted effort across the firms different businesses and
geographies. This is about creating a consistent understanding of what constitutes the right kind
of business for HSBC and implementing consistent policies and procedures necessary to
achieve that aim. By managing financial crime risk effectively, we will be able to focus on what
HSBC does best: connecting customers to opportunities and facilitating international trade and
capital flows.