BANKING giant HSBC has moved to reassure customers after admitting a computer disc containing sensitive information about 370,000 people was lost after being posted from its Southampton offices.

It now faces an investigation by financial watchdogs and a possible hefty fine.

The disc went missing about four weeks ago after being sent from the group's offices in the city to a reinsurer with an external courier.

It contained the names, dates of birth and insurance cover levels of people with life assurance at the bank, generally linked to a mortgage.

HSBC, which has a major regional centre at Southampton's Nelson's Gate offices, has informed the Financial Services Authority (FSA) about the breach. It is thought the group could be investigated and face a fine if the regulator finds security was lax.

The City watchdog has previously fined firms for not having proper systems in place to protect data.

It fined insurer Norwich Union £1.26m in December for not having effective controls in place, enabling fraudsters to cash in £3.3m of policies.

Nationwide was also fined £980,000 last year after a laptop containing confidential customer details was stolen.

An HSBC spokesman said: "We are looking into it.

Basically it has got lost from A to B. The reinsurer we sent it to is doing a thorough search for the disc.We will do anything we can to find it.

"There are no financial details there in terms of banking details. There are no address details. The possibility of anybody being able to commit fraud is limited."

An FSA spokesman declined to comment on an individual case.

HM Revenue & Customs last year lost computer discs containing the names, addresses, dates of birth, child benefit numbers, National Insurance numbers and bank or building society account details of 25 million child benefit recipients.