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AML compliance – A banking nightmare? The HSBC case study

AML compliance – A banking nightmare? The HSBC case study This article provides an analysis of the HSBC Swiss bank accounts scandal from the perspective of AML compliance, and considers the future AML implications for the banking sector and HSBC. It reviews the use of a whistleblower to highlight AML irregularities rather than official reporting through the current AML compliance system. The article uses secondary data to offer a viewpoint on the HSBC issues from a money laundering and financial crime perspective. It extracts key statements from staff at HSBC and regulators, and examines how AML risk assessment was undertaken at this time and what changes need to occur in the future. It considers the implications of the current theoretical context for AML from an agency theory perspective. The main findings are that AML compliance needs to be embedded into a proactive corporate social responsibility approach, rather than relying solely on regulation to improve detection and reporting of money laundering activity. The research topic is new and therefore analysis papers and other academic writing on this topic are limited. Future research could consider the outcomes of the Swiss bank’s attempts to prosecute the whistleblower and whether this would have implications for future internal reporting and whistleblowing approaches to support AML compliance. The outcomes from the research are the recommendations to the banking sector on addressing AML deficiencies, especially within the context of an evolving level of criminal sophistication towards money laundering. The article supports the argument for integrating social corporate responsibility and AML compliance in order to produce a whole bank response to financial crime. This is in contrast to the current systems that seem to be prevalent within the financial services, of profit and business being seen as separate rather than integral to regulation and control. The value of this article is the current example of the HSBC Swiss case and the focus specifically on AML compliance rather than tax evasion, which has been the media angle on the issue. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Disclosure and Governance Springer Journals

AML compliance – A banking nightmare? The HSBC case study

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References (33)

Publisher
Springer Journals
Copyright
Copyright © 2015 by Palgrave Macmillan, a division of Macmillan Publishers Ltd
Subject
Business and Management; Business and Management, general; Accounting/Auditing; Corporate Finance; Corporate Governance
ISSN
1741-3591
eISSN
1746-6539
DOI
10.1057/jdg.2015.4
Publisher site
See Article on Publisher Site

Abstract

This article provides an analysis of the HSBC Swiss bank accounts scandal from the perspective of AML compliance, and considers the future AML implications for the banking sector and HSBC. It reviews the use of a whistleblower to highlight AML irregularities rather than official reporting through the current AML compliance system. The article uses secondary data to offer a viewpoint on the HSBC issues from a money laundering and financial crime perspective. It extracts key statements from staff at HSBC and regulators, and examines how AML risk assessment was undertaken at this time and what changes need to occur in the future. It considers the implications of the current theoretical context for AML from an agency theory perspective. The main findings are that AML compliance needs to be embedded into a proactive corporate social responsibility approach, rather than relying solely on regulation to improve detection and reporting of money laundering activity. The research topic is new and therefore analysis papers and other academic writing on this topic are limited. Future research could consider the outcomes of the Swiss bank’s attempts to prosecute the whistleblower and whether this would have implications for future internal reporting and whistleblowing approaches to support AML compliance. The outcomes from the research are the recommendations to the banking sector on addressing AML deficiencies, especially within the context of an evolving level of criminal sophistication towards money laundering. The article supports the argument for integrating social corporate responsibility and AML compliance in order to produce a whole bank response to financial crime. This is in contrast to the current systems that seem to be prevalent within the financial services, of profit and business being seen as separate rather than integral to regulation and control. The value of this article is the current example of the HSBC Swiss case and the focus specifically on AML compliance rather than tax evasion, which has been the media angle on the issue.

Journal

International Journal of Disclosure and Governance – Springer Journals

Published: May 21, 2015

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