HSBC has been fined £57.4 million after “serious failings” to protect customer deposits.
The bank has been issued the fine, which is the first of its kind under a new UK law, after failing to accurately identify customer deposits eligible for Britain’s Financial Services Compensation Scheme.
This scheme allows deposits of up to £85,000 to be protected if the bank were to collapse.
HSBC subsidiary, HSBC Bank, was discovered to have incorrectly tagged 99% of eligible deposits as ineligible under FSCS protection. Through this negligence by HSBC, £112 billion worth of deposits went unprotected over several years.
Prior to this, in 2012, HSBC paid out $1.9 billion following an investigation by the US department of Justice. Again, for money laundering, specifically from Mexican drug cartels.
The Bank of England sets out new enforcement policies which aim to speed up investigations in these cases. There are plans to make further amendments to its enforcement policies in 2024.
HSBC has said it has made “efforts to fully resolve these issues.”