LONDON - Industry sources suggest UK bank HSBC is gearing up to apply for the advanced measurement approach (AMA) to operational risk under Basel II. The bank's operational risk programme has historically lagged behind other banks in the UK but this is all changing. HSBC has hired Mike Constantinou, ex-head of operational risk framework and measurement at Barclays, to run its AMA programme. And industry sources suggest the bank is poised to make a final decision on which new operational risk management system to purchase as its own op risk system developed in house is too basic to manage the switch to the AMA. HSBC was unwilling to confirm or deny reports it is preparing to go AMA when contacted by OR&C. It makes sense for a bank the size of HSBC to go AMA and the move will no doubt please the UK regulator. It remains to be seen whether the remaining large UK banks will follow suit - RBS could come under pressure from the UK Financial Services Authority to make the move to AMA as a part-nationalised bank but only if it is not broken up, which seems likely. Meanwhile, at HSBC the movement to standardise all processes and procedures known as the "One HSBC project", which received £1 billion in investment in 2008, is two years into its implementation phase. The strategy is to create a single technology platform by 2011 that will replace 55 separate core banking systems, 24 credit card systems, 41 internet banking systems and 40 desktop standards with a single platform, thus reducing running costs, streamlining banking operations and improving customer services. The bank merged the role of chief information officer and chief operating officer in September 2008, as part of a strategy to make the bank technology-led....
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