Financial Crime World

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Hong Kong Banks Boost Anti-Fraud Efforts Amid Rising Digital Threats

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HONG KONG - As digital fraud cases surge in Hong Kong, banks are stepping up their anti-fraud measures to protect customers and prevent financial crimes.

Rising Tide of Fraud Cases

According to figures from the Hong Kong Monetary Authority (HKMA), there were 954 fraud-related banking complaints in the first nine months of 2023, exceeding the total of 555 cases for the whole of 2022. The trend is similar to that reported by the Hong Kong Police Force (HKPF).

HKMA’s Response

In response to the surge in digital threats, the HKMA has worked with the industry to provide regulatory support, improve collaboration and promote innovation. The five initiatives announced in April 2023 will enhance anti-fraud efforts in areas such as information sharing, transaction monitoring, and customer alerts.

Key Measures Include

  • Information Sharing: The Fraud and Money Laundering Intelligence Task Force (FMLIT) has been delivering significant results since its inception in 2017. To build on this success, participation has been expanded to include 28 retail banks and six Stored Value Facility (SVF) Licensees.
  • Transaction Monitoring: All 28 retail banks have implemented real-time fraud monitoring and detection capabilities, including the ability to alert customers of high-risk transactions.
  • Customer Alerts: A pre-transaction alert mechanism for Fast Payment System (FPS) transactions will be introduced based on Scameter information.

Implementation Deadline

All Authorized Institutions (AIs) are required to make appropriate system enhancements and communicate these changes to customers in good time, making reference to relevant circulars and communication materials issued by the HKMA. The objectives and requirements should be clearly communicated to staff, and key performance indicators should be developed to track performance.

Ongoing Supervision

The HKMA will collect related data from AIs and review the effectiveness of implementation as part of ongoing supervision.

Enhancing Ecosystem Response

The HKMA will continue to work closely with banks and all stakeholders to enhance the ecosystem response to the evolving threat from fraud and financial crime.