HSBC’s money laundering scandal has led its Australian head to tighten corporate governance standards to prevent similar scandals hitting our shores. What can you learn from his pre-emptive strike?
The scandal, that saw the bank’s head of compliance in the US dramatically resign during a senate hearing, highlighted some significant risk management failures.
Notably, HSBC admitted that its compliance officers weren’t able to keep up with the bank’s rate of growth, meaning strict controls on who was using its systems were not maintained and Mexican drug money was laundered through the bank.
Reacting to the bank’s overseas dramas HSBC Australia’s CEO Paulo Maia has told the Sydney Morning Herald that he would be introducing top global governance standards on his watch.
“We’re introducing global standards that specify highest standard required in any country we operate, and that must apply to every part of the group including HSBC in Australasia,” he told the SMH.
The report adds that HSBC’s global CEO, Stuart Gulliver, has admitted that the organisation’s hitherto disjointed “federation of banks” structure contributed to its failings. It is now spending around $400m on a global compliance initiative.
HSBC money laundering scandal: what can you learn from its mistakes?
HSBC head of compliance quits during senate hearing