September 27, 2019
Says its automated anti-money laundering system is an industry first
by Max Smolaks 27 September 2019
Banking giant HSBC’s trade finance business hasintroduced an automated financial crime detection system that can identify morethan 50 potential money laundering scenarios.
The bank calls the system, built inpartnership with British startup Qantexa, an industry first.
It already screens all trade financetransactions in the UK and Hong Kong and is being rolled out worldwide.
The business has also introduced an automated sanctions checking system, developed in-house using machine learning technologies. It is live in India and will be deployed across 41 markets by the end of the year.
“This new capability marks a significantmilestone in the bank’s intelligence-led approach to detecting financial crime,”said Adrian Rigby, COO of Global Trade and Finance (GTRF) at HSBC.
“The introduction of the first automated AMLcapability in the Trade Finance industry enables HSBC to more effectivelyconcentrate our resources on genuine financial crime risk within our businessand make trade safer for customers and society.”
HSBC’s GTRF business is essentially theworld’s largest trade finance bank, processing $1 million worth of trade turnoverevery minute. It has customers in 56 countries, and screens over 5.8 million transactionsa year for signs of money laundering and other financial crime.
Qantexa is an analytics and AI startupestablished in London in 2016. A big chunk of its funding comes from HSBC,which participated in two out of three funding rounds to date.
Qantexa created a system that relies on automated‘contextual monitoring’ to build a financial transaction profile that draws onboth internal and external data – for example, company ownership information. Theautomated system then uses algorithms to identify suspicious patterns andcommon signs of criminal networks.
Its creators say the system at HSBC makes morethan double the average number of checks against indicators at a transactionallevel.
“The solution built with the Quantexa platformuses billions of data points to provide an entity resolution and networkintelligence framework which references over 40 billion financial transactions.Using this technology, customer activities can be continuously assessed andscored for risk,” explained Vishal Marria, CEO of Quantexa.