Financial Crime World

Here is the article in markdown format:

Hong Kong Banks to Share Customer Information to Fight Financial Crime

In a bid to combat the rising tide of digital fraud in Hong Kong, the city’s banking sector is set to introduce new rules allowing banks to share customer information with each other. The move comes as part of a wider effort by the Hong Kong Monetary Authority (HKMA) and law enforcement agencies to crack down on financial crime.

Rising Cases of Digital Fraud

According to data from the HKMA, there were over 1,200 fraud-related banking complaints last year, more than double the number in 2022. This is consistent with a 52% increase in deception cases reported to law enforcement in the first ten months of last year, with estimated losses to victims of about HK$7.2 billion.

New Rules for Sharing Customer Information

The new rules will allow banks to share information on customers who are suspected of being involved in financial crime, including fraud and money laundering. This will enable them to identify and close accounts that are being used for illicit activities more quickly. However, the ability of banks to share customer information is currently subject to strict controls and safeguards, designed to protect the confidentiality of customer data.

Secure Electronic Platform

The new rules will introduce a secure electronic platform allowing participating banks to share information on suspicious activity. The Financial Intelligence Evaluation Sharing Tool (FINEST), launched in June last year by the Hong Kong Association of Banks with the support of the HKMA and Police, is an example of this type of platform.

Expert Reaction

“This is a positive development,” said a spokesperson for the Hong Kong Association of Banks. “By allowing banks to share information on suspicious activity, we can better identify and prevent financial crime.”

Next Steps

The consultation period for the proposal closes on 29 March 2024, after which the HKMA will issue a summary of feedback received and draw up necessary legal amendments for consideration by the Legislative Council.

Consultation Document

The consultation document can be found at: [insert link]

Background

  • There were over 1,200 fraud-related banking complaints last year in Hong Kong.
  • This is consistent with a 52% increase in deception cases reported to law enforcement in the first ten months of last year, with estimated losses to victims of about HK$7.2 billion.
  • The Financial Intelligence Evaluation Sharing Tool (FINEST) has been used to facilitate the exchange of information on suspicious activity.

Key Points

  • Banks will be allowed to share customer information for the purposes of detecting or preventing financial crime.
  • The sharing will be subject to strict controls, including the use of secure platforms and the protection of customer confidentiality.
  • Participating banks will have access to a secure electronic platform allowing them to share information on suspicious activity.