Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 229

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 229
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, seeking to address data privacy challenges through international standards, guidance and legislation. Digitalisation and technological advances risk Developments in technology and changes to regulations are enabling new entrants to the industry, particularly with respect to payments. This challenges us to continue innovating to address evolving customer requirements, drive efficiency and adapt our products to attract and retain customers. As a result, we may need to increase investment in our business to adapt or develop products and services to respond to our customers’ evolving needs. We aim to ensure that new digital capabilities do not weaken our resilience or wider risk management capabilities. New technologies such as generative AI, large language models, blockchain, and quantum computing offer both business opportunities and potential risks for HSBC. As with the use of all technologies, we aim to maximise their potential while seeking to ensure a robust control environment is in place to help manage the inherent risks. Mitigating actions – We continue to monitor this emerging risk and advances in technology, as well as changes in customer behaviours, to understand how these may impact our business. – We assess new technologies to help develop appropriate controls and maintain resilience. – We closely monitor and assess financial crime risk and the impact on payment transparency and wider payment infrastructure. – We conduct risk assessments and have governance in place (for example on AI and digital assets and currencies) to help enable Group-wide cross-risk focus on areas of emerging technology. – We make public commitments as to how we engage with new technology innovation, for example publishing HSBC’s Principles for the Ethical Use of Data and AI. – We continue to make improvements to our related policies and to our control framework in order to enhance the end-to-end management of risks from new technology innovations. Evolving regulatory environment risk We aim to keep abreast of the emerging regulatory compliance and conduct risk agenda. Current focus areas include but are not limited to: ESG developments, particularly managing the risk of ‘greenwashing’; ensuring good customer outcomes and addressing customer vulnerabilities; enhancements to regulatory reporting controls; employee compliance including the use of e-communication channels; and developments in legal principles or conduct requirements (including in relation to the risk of such developments in one part of the financial industry being construed as applying to other parts of the financial industry, which could lead to legal or regulatory proceedings).

| 152 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

The competitive landscape in which the Group operates may be impacted by future regulatory changes and government intervention including changes driven by governments adopting a pro-business growth agenda. Mitig