The title of this research study is “The Compliance Risk Management of Foreign Commercial Banks: The Case with HSBC (Hong Kong)”.Hong Kong Shanghai Banking Corporation (HSBC) is one of the world’s largest banking and financial services organizations (HSBC, 2017). HSBC serves more than 37 million customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets and Global Private Banking. Their network covers 70 countries and territories in Europe, Asia, the Middle East and Africa, North America and Latin America.
Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by about 204,000 shareholders in 133 countries and territories. Established in 1865 to finance the growing trade between Asia and Europe, HSBC has become the biggest bank incorporated in Hong Kong. The bank provides a range of personal, commercial and corporate banking financial services across Asia. Besides this, the company has 4000 offices in 70 countries worldwide (HSBC Bank, 2017).
The main aim of the business is to provide facilities to customers related to finances so that they can fulfil their demands and needs in an effective manner. The company puts efforts to build strong and long term relationships with its stakeholders for the purpose of creating value for the society and provide returns to its stakeholders. In addition to this, the bank conducts its operations in a fair manner to protect the interests of its customers, employees and other stakeholders. Along with this, the company organizes different training programs to upgrade and develop new skills in its employees for the purpose of achieving its aim and objectives. Besides this, the company provides rewards and recognition to its employees for providing good quality performance which motivates employees to increase their productivity (Newton, 2012).Compliance risk management (CRM) in international banking industry is becoming increasingly important (McKinsey & Company, 2015). In 1990s, the international banking industry suffered a series of bank losses due to the negligence in compliance risk management (Lobha, 2010).For example, in 1995, with 233 years of continuous operating history, the Bank of Bahrain filed bankruptcy due to illegal trading of a young trader (Lobha, 2010). Although the number of major incidents of international financial institution was decreasing, the magnitude of any given incidents is increasing significantly (Lobha, 2010).