Hong Kong Banks Ordered to Upgrade Fraud Detection Tools to Protect Customers

Hong Kong Monetary Authority Issues Stern Warning to Banks

The Hong Kong Monetary Authority (HKMA) has issued a stern warning to banks in the city, ordering them to implement new security measures to combat rising cases of digital banking fraud. The move is aimed at protecting customers from losing their hard-earned money to scammers.

New Rules for Banking Fraud Detection

Under the new rules, banks are required to:

• Establish dynamic fraud monitoring systems: These systems must be able to detect suspicious transactions based on the latest threat intelligence and customer data.
• Use scam intelligence sources and network analytics tools: Banks must use these tools to identify suspicious transactions and accounts in real-time and generate timely alerts to customers.

Enhanced Customer Tools for Account Monitoring

Banks are also required to provide customers with advanced tools that enable them to review and monitor account activities. These tools should include:

• Detailed information on login date and time: Customers must be able to view the date and time of each transaction.
• Geographical location: The geographical location of each transaction must be available for customer review.
• Device information: The device used for each transaction must be recorded.

Containing Damage in Case of a Security Breach

To contain the damage in case of a security breach, banks must establish a mechanism for customers to promptly suspend their e-banking accounts. This can be done through a dedicated hotline or an easily accessible function on internet banking or mobile banking applications.

Before reactivating a suspended account, banks will need to perform stringent customer authentication procedures to ensure that the account is being accessed by its rightful owner.

Implementation Timeline

The new measures must be implemented as soon as possible and no later than March 31, 2024.