Hong Kong Banks Told to Boost Online Security Amid Rise in Digital Crimes

The Hong Kong Monetary Authority (HKMA) has issued a circular to all authorized institutions, requiring them to implement new security measures to strengthen the protection of electronic banking services. This move comes as the number of technology crime cases reported in the first half of 2023 reached 15,000, representing a 47% increase over the same period last year.

Enhancing Digital Banking Security

The HKMA’s decision is part of its ongoing efforts to enhance digital banking security, following the introduction of measures to strengthen payment card services earlier this year. The new measures aim to increase protection for bank customers against unauthorized transactions and empower them to safeguard their accounts.

Key Measures

To counter fraudsters seeking to conduct unauthorized transactions through e-banking accounts, the HKMA has outlined several key measures:

1. Dynamic Fraud Monitoring Mechanism

Authorized institutions should establish dynamic fraud monitoring rules incorporating the latest threat intelligence, customers’ historical data, and transaction patterns.

2. Ambush Authentication

If suspicious e-banking activities are detected, AIs (Artificial Intelligence systems) should implement ambush authentication to verify customer identities before allowing transactions.

3. Notification of Unusual Activities

Banks should conduct risk assessments and notify customers of unusual e-banking activities, such as changes in geographical locations or use of new devices.

To prevent unauthorized access, banks should implement session management controls that disallow concurrent logins to an e-banking account.

Industry Expectations

The HKMA expects all authorized institutions to implement the above measures as soon as practicable and no later than March 31, 2024. The authority will exercise flexibility where an institution has genuine practical difficulties in observing this implementation timeline.

Promoting Public Awareness of E-Banking Frauds

The move is part of the HKMA’s ongoing efforts to enhance digital banking security and promote public awareness of e-banking frauds. By implementing these measures, banks can better protect their customers and maintain trust in electronic banking services.