Financial Crime World

Hong Kong Banking Sector Faces High Risk of Money Laundering

A Growing Threat to the Financial System

HONG KONG - The Hong Kong Monetary Authority (HKMA) has released its latest money laundering and terrorist financing risk assessment report for 2022, highlighting the ongoing threat posed by financial crime to the banking sector.

Key Findings of the Report

  • The local banking sector continues to face a high level of risks of being exploited for money laundering.
  • Major developments since 2018 have contributed to an accelerated rise in online commerce and financial services.
  • The widespread application of technology such as remote onboarding, particularly during the COVID-19 pandemic, has also led to new payment methods and virtual assets emerging.

Risks Associated with Money Laundering

  • Fraud: The report notes that major developments have contributed to an accelerated rise in online commerce and financial services.
  • Corruption: The widespread application of technology such as remote onboarding has led to new payment methods and virtual assets emerging.
  • Tax Crimes: The launch of virtual banks and the Faster Payment System in Hong Kong has also led to new payment methods and virtual assets emerging.

Initiatives to Address Risks

  • The HKMA will continue to work closely with authorized institutions (AIs) and other competent authorities to strengthen collaboration and intelligence sharing.
  • The authority plans to roll out further initiatives to support innovation and Regtech adoption, including the second Anti-Money Laundering Regtech Lab (AMLab) on a new theme.

Call for Increased Vigilance

In response to the findings of the report, experts are calling for increased vigilance and cooperation between financial institutions and law enforcement agencies to prevent and disrupt potential abuse of the banking system for illicit fund flows.

“The ongoing threat of money laundering requires a collective effort from all stakeholders in the financial sector. We must work together to stay ahead of emerging threats and protect the integrity of our customers’ bank accounts and the entire system.”