Hong Kong’s Banking Sector Steps Up Efforts to Combat Rising Fraud Cases

Introduction

The Hong Kong Monetary Authority (HKMA) has launched a series of initiatives to combat the increasing number of banking fraud cases in the city. According to data from the HKMA, banking fraud complaints in Hong Kong nearly doubled in the first nine months of 2023.

Rising Banking Fraud Cases in Hong Kong

• In the first nine months of 2023, there were 954 banking fraud complaints in Hong Kong, compared to 555 for the whole of 2022.
• The surge in cases has prompted the HKMA to push banks to expand their interbank information-sharing platforms to include personal accounts and introduce real-time fraud alerts.

Initiatives Launched by the HKMA

• In mid-October, the HKMA issued a circular to banks urging them to improve their transaction monitoring systems and enhance customer education on online banking security.
• The authority also launched the Faster Payment System (FPS) suspicious proxy ID alert and the Anti-Deception Alliance in November.

Types of Fraud Cases on the Rise

According to experts, social engineering fraud, money mule scams, phishing, and malware attacks have become increasingly common in Hong Kong’s banking sector. Thanh Tai Vo, director of fraud and identity at LexisNexis Risk Solutions, said:

• There has been an increase in fraud and scams in Hong Kong, including social engineering fraud, using money mules to launder proceeds from criminal activities, phishing scams, and malware.
• The use of online banking services has created a digital trail of data points, making real-time detection more crucial than ever.

Collaboration is Key

LexisNexis Risk Solutions provides tools to help banks combat fraud in Hong Kong. The company’s ThreatMetrix platform uses data from its Digital Identity Network, which processes over 100 billion transactions annually, to track scammers globally.

The HKMA has also launched the Financial Intelligence Evaluation Sharing Tool, a bank-to-bank information-sharing platform, in collaboration with the Hong Kong Association of Banks and the Hong Kong Police Force. The tool is being rolled out in phases and aims to improve the sharing of information among banks and law enforcement agencies.

Conclusion

As the banking sector continues to evolve, experts warn that the fight against fraud must be a collaborative effort between financial institutions, regulators, and law enforcement agencies. By working together, they can create a safer and more secure online banking environment for consumers in Hong Kong.