HSBC has admitted to the data theft of about 24,000 of its private banking customer accounts from a branch in Switzerland.
Europe's biggest bank said an ex-employee, IT specialist Herve Falciani, stole the personal details of 15,000 existing and 9,000 of its former clients about three years ago.
The hugely embarrassing theft could put the bank in legal conflict with authorities over tax evasion.
Swiss financial markets regulator Finma has launched an investigation into how the data was stolen and whether HSBC's response met legal requirements.
HSBC said 15,000 of the accounts were still active, while the rest were closed. The theft affected clients with accounts in Switzerland before October 2006.
The stolen files were seized by French authorities after Falciani fled from Switzerland while under investigation. Switzerland has issued a warrant for his arrest.
The breach, that affected 15 per cent of HSBC's total private client base, is a serious blow to its reputation. The bank said it will spend over SFr100m (£62.3m) to upgrade and improve the security of its data systems.
HSBC Private Bank chief executive, Alexandre Zeller, said HSBC "deeply regrets this situation and unreservedly apologises to our clients for this threat to their privacy."
