Contractor Hervé Falciani was working on HSBC computer systems in Switzerland when, in 2007, he came across a trail of suspicious-looking breadcrumbs. These led him to the conclusion that something wasn’t right.

Light fingers

I like to imagine him popping the offending breadcrumbs in a bag. He high-tailed it back to France with the evidence.

Mr Falciani may possibly have thought he had nuggets of gold - because he’s accused of having tried to sell them.

A big liability

But that’s a detail, because by 2010, the breadcrumbs led to the then Finance Minister of France, Christine Lagarde, drawing up a list of names, which resulted in arrests in at least five countries of people suspected of organised tax evasion.

They also led to a diplomatic rift between Switzerland and France, and the indictment in France of HSBC for money laundering through tax evasion.

As it turns out, those breadcrumbs were a big liability.

Now incidents like this, and the general response of regulators since the financial crash years ago, have led to increasing pressure on all the banks to clean up their act.

One group of regulators, The Basel Committee on Banking Supervision, created a set of rules aimed primarily at the top 30 global banks - with the recommendation they apply to nationally important banks as well.

These rules don’t only cover internal systems - they also cover outsourced systems. They don’t only cover market, credit and counterparty risk - they also cover operational risk.

Turning an asset

Timely, comprehensive breadcrumbs are needed to form the trail that proves a bank is following the rules. That in turn leads to reduced conduct risk.

Achieve that, and the breadcrumbs have ceased to be a liability. They’ve become an asset instead.

Photo courtesy of nick.com.