Financial Crime World

Hong Kong Monetary Authority Cracks Down on Banking Fraud: New Measures and Partnerships

Amidst a surge in banking fraud cases in Hong Kong, the Hong Kong Monetary Authority (HKMA) is taking bold steps to enhance fraud detection and prevention in the city’s evolving banking landscape.

HKMA’s New Measures

  • Expansion of Interbank Information-sharing Platforms: The HKMA has urged banks to expand their interbank information-sharing platforms to cover personal accounts.
  • Real-time Fraud Alerts: The introduction of real-time fraud alerts is to boost transaction monitoring and enhance fraud detection.
  • Improvement of Fraud Alerts for FPS Users: The HKMA is working on improving fraud alerts for bank customers utilizing the local Faster Payment System (FPS).

HKMA’s Recent Initiatives

  • November 2023: The HKMA launched the FPS Suspicious Proxy ID Alert and the Anti-Deception Alliance to combat financial malfeasance.

Significant Increase in Banking Fraud Complaints

Hong Kong has witnessed a significant increase in banking fraud complaints. According to HKMA statistics, there were 954 cases reported in the first nine months of 2023, compared to 555 in the entirety of 2022.

The Concerns of Industry Experts

Thanh Tai Vo, Director of Fraud and Identity at LexisNexis Risk Solutions, expressed concerns over the spike in fraud and scams in Hong Kong. Vo stated that there have been an increase in various types of fraud and scams, including:

  1. Social Engineering Fraud
  2. Money Mules
  3. Phishing Scams
  4. Malware

Vo highlighted the importance of real-time fraud detection:

“Consumers are increasingly interacting online, generating multiple digital data points and online digital footprints. As a result, real-time detection is now more important than ever before.”

Role of Banks and SVFs

Vo called on licensed banks and stored value facility operators (SVFs) operating in Hong Kong to play a pivotal role in raising public awareness and implementing real-time fraud monitoring systems.

Information Sharing Platforms

This summer, the HKMA, Hong Kong Association of Banks, and Hong Kong Police Force joined forces to launch the Financial Intelligence Evaluation Sharing Tool, a bank-to-bank information sharing platform. The implementation of this tool is currently being rolled out in phases.

Use of Advanced Tools

Vo also highlighted the use of advanced tools such as LexisNexis ThreatMetrix and the LexisNexis Digital Identity Network as valuable resources in combating fraud. These tools process over 100 billion transactions annually to help trace scammers globally.