In cooperation with Google Cloud, the bank has been utilizing data analytics to develop the program, which would use machine learning to inspect the data from the banking behavior of more than 38 million customers.
Jennifer Calvery, global head of financial crime threat mitigation, said the program had shown positive results in the prototype stage. The bank has also reached out to regulators, which were supportive of the endeavor.
The program would work by assessing the large amount of data and assigning a bank customer with a financial crime score. Those with an appropriate score would be singled out for closer scrutiny.
“We are looking for criminal activity in a completely different way, which will require us to fundamentally change policies and processes,” Calvery said. “What we have seen when testing the prototype is that it is finding suspected criminal activity that had only been identified in the past by humans, not by our own systems.”
The system cross-references customer actions and flags unusual activity for review. It also analyzes transactions and networks to help the bank find any indications of illegal activity.
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Because there was so much data to analyze, the bank felt that Google was the obvious choice for a partnership. HSBC is known for investing in new technology – earlier this month, the bank backed a U.S. startup called Axoni in the blockchain field.
In addition to the anti-money laundering system, HSBC has a project in the works that does country-by-country liquidity reporting. The bank said it would have an estimated 100 petabytes of data on Google Cloud by the end of the year.
Calvery said the system’s ability to handle massive amounts of data will change the way the bank handles financial risk.
“I’m talking about taking what the financial industry does today, in terms of managing financial risk, and making it more efficient,” Calvery said. “It’s a game changer because it’s something we can scale when you operate in more than 60 jurisdictions. It will enable us to have consistency in how we do [anti-money laundering].”
