HSBC Holdings Plc and Morgan Stanley are working with outside firms to develop a shared client-screening service amid a crackdown by regulators on money laundering.
Genpact Ltd. and Markit Group Ltd. are creating the service, which will help banks satisfy so-called know-your-client requirements, Hamilton, Bermuda-based Genpact said today in a statement. The service will allow banks to start new trading relationships faster and cut costs by sharing expenses, according to the statement.
The U.S. fined London-based HSBC $1.9 billion last year over claims the lender gave terrorists and drug cartels access to the U.S. financial system. Europe’s biggest bank was accused of failing to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico, prosecutors said.
HSBC accepted responsibility at the time and said it’s “a fundamentally different organization from the one that made those mistakes.” New York-based Morgan Stanley, owner of the world’s largest brokerage, hasn’t faced fines over money laundering since the financial crisis.
The new service could “help drive higher standards, consistency and best practice,” David Burnett, chief operating officer of HSBC’s banking and markets unit, said in the statement.