Jurisdiction(s):
United Kingdom

Using AI to meet the UK 'failure to prevent fraud' offence: lessons from HSBC, staff monitoring, cross-border challenges and reporting to FCA and SFO

Published on: 26 September 2025

Published by a Law360 reporter

Legal News

Article summary

The UK’s largest bank is deploying automated systems to spot fraud under the UK offence that came into force on 1 September 2025. Among them is Google AML AI, built with Google, which scans some 900 million transactions every month across 40 million customer accounts. Jennifer Calvery, HSBC’s group head of financial crime, told Law360 that Google AML AI and other automation help underpin the bank’s defence to the “failure to prevent fraud” offence. The legislation exposes companies to criminal action where preventative controls are judged inadequate, and major lenders such as HSBC fall within scope. The regime captures businesses meeting any two of the following three tests:

More than 250 employees
Turnover above £36m
Assets of £18m or more

HSBC's multi-tier strategy

Calvery said strong leadership, staff training programmes and sharing intelligence across the industry are just as critical. Before joining HSBC, she held a CEO-equivalent position at the Financial Crimes Enforcement Network in Washington, DC. She cautioned against detailing operational fraud controls in public, noting that criminals actively seek out and exchange such information...

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