Financial Institutions in Hong Kong Must Prioritize Anti-Money Laundering Compliance
Hong Kong, a major financial hub, is vulnerable to money laundering and terrorism financing risks. To combat these dangers, the city has established strict anti-money laundering (AML) regulations that financial institutions must adhere to.
Understanding AML Risks and Regulations
As a significant player in the global economy, Hong Kong is not on the Financial Action Task Force (FATF) list of countries with strategic AML deficiencies. However, the city still needs to comply with FATF recommendations to prevent money laundering and terrorism financing.
Key AML Regulators in Hong Kong
The Hong Kong Monetary Authority (HKMA) is responsible for ensuring the stability of the financial system, which includes establishing AML laws and regulations. The HKMA requires businesses to comply with domestic policy, FATF standards, and Asia Pacific Group on Money Laundering (APG) guidelines.
Primary Legislation Governing AML Compliance
The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) and the Banking Ordinance are the primary legislation governing AML compliance in Hong Kong. The AMLO requires businesses to implement risk-based procedures to detect and prevent money laundering, while the BO mandates the use of suitable accounting systems.
What Should Financial Institutions Do?
To ensure compliance with AML regulations, financial institutions must:
- Monitor customer relationships: Regularly review and update customer information to identify potential risks.
- Implement transaction monitoring: Use technology to monitor transactions for suspicious activity.
- Conduct sanctions screening: Screen payments against relevant sanctions lists to prevent prohibited transactions.
- Perform customer due diligence (CDD): Verify customer identity, assess risk, and perform ongoing CDD checks.
How Can Tookitaki Help?
Tookitaki is a regulatory technology company that provides financial crime detection and prevention solutions to leading banks and fintech companies. Our Anti-Money Laundering Suite (AMLS) covers the entire customer onboarding and ongoing processes through its Transaction Monitoring, Smart Screening, Customer Risk Scoring, and Case Manager.
By partnering with Tookitaki, financial institutions in Hong Kong can:
- Reduce false positives: Streamline transaction monitoring and minimize unnecessary alerts.
- Enhance risk coverage: Gain a comprehensive view of customer risk from an internal to an industry-wide perspective.
- Improve compliance efficiency: Automate AML processes and reduce administrative burdens.
Get in Touch with Tookitaki Today
Contact us today to learn how Tookitaki can help your business strengthen its AML compliance efforts and mitigate the risks associated with financial crime.