Financial Crime World

Cybercrime and Financial Institutions in Hong Kong: A Growing Threat

The economic cost of cybercrime worldwide is estimated to reach a staggering US$6 trillion in 2021, surpassing the global GDP loss due to the COVID-19 pandemic. In Hong Kong, a leading financial centre, the level of economic losses experienced as a result of cybercrime has been on an upward trend.

Financial Sector: A Major Target

The financial services sector is heavily targeted by hackers and other cybercriminals, who are attracted to the sensitive data held by banks and other financial institutions. In fact:

  • Attacks against the financial sector increased 238% globally during the first three months of the pandemic.
  • 80% of financial institutions reported an increase in cyberattacks in 2020.

Hong Kong’s Vulnerability to Cybercrime

Hong Kong has seen a huge increase in cybercrime over the past decade, with:

  • Reported incidents rising from 2,206 in 2011 to 12,916 in 2020.
  • The value of those crimes rose from HK$148 million in 2011 to a staggering HK$2.96 billion last year.

A Need for a Stronger Cybersecurity Framework

To protect itself from cybercrime, Hong Kong needs to establish a stronger cybersecurity framework, including:

  • Development of an omnibus Cyberspace Protection Ordinance, which would provide a comprehensive and cohesive approach to addressing cyber threats.
  • Clearer work plans with policy priorities over a longer time horizon to facilitate coordination among stakeholders.

Regulation and Oversight: A Challenge

The regulation and oversight of cybersecurity issues in Hong Kong are fragmented, with multiple agencies responsible for different aspects of cybersecurity. The:

  • Cyber Security and Technology Crime Bureau (CSTCB) of the Hong Kong Police Force is responsible for handling cyber security issues.
  • Office of the Privacy Commissioner of Personal Data oversees data-related issues.

A Need for Coordination and Collaboration

To effectively address the growing threat of cybercrime in Hong Kong, there needs to be greater coordination and collaboration among government agencies, financial institutions, and other stakeholders. This includes:

  • Development of an overarching structure with specialized streams of expertise to meet evolving supervisory requirements.

A Call to Action

As the world looks ahead to a post-pandemic situation, governments, regulators, and businesses need to take a closer look at the cost of cybercrime, which continues to rise. Hong Kong needs to keep pace with international cybersecurity standards and consider adopting the cybersecurity frameworks of jurisdictions widely viewed as leaders in the field.