Carmen Chu, Exec Director, Enforcement and AML, Hong Kong Monetary Authority, Shares Banking Sector Updates

Carmen Chu, Executive Director (Enforcement and AML), Hong Kong Monetary Authority (HKMA), recently noted during opening remarks at the AML Regtech Lab (AMLab) that it’s a great pleasure to welcome people to the very first AML Regtech Lab, or AMLab, which the HKMA is hosting in collaboration with Cyberport and working cooperatively with InvestHK as part of Hong Kong Fintech Week 2021.

Chu stated:

“Today, the launch of AMLab represents the latest phase of the HKMA’s engagement with the banking sector on AML Regtech, supported by our consultant Deloitte. Our industry engagement began with the forum in 2019 to examine opportunities and challenges from the greater use of technology, and followed up with our case study guidance issued this January.”

Chu added:

“The focus of this first AMLab is network analytics, which has great value in identifying hidden connections between accounts, and providing high-quality information for sharing with other stakeholders in the AML ecosystem.”

Chu also noted that they intend to empower a group of banks, which are not using this technology yet – but which they are aware have “the vision and data to do so, to work with data experts to experiment, for the first time, using synthetic data to simulate a fraud mule-account network.”

Chu also mentioned that these experiments will “look at integrating alternative data, beyond the usual customer and transaction information, to help develop the skills and capabilities in network analytics and risk identification.”

Chu added that network analytics is just one example of technology that can assist banking institutions with preventing and identifying fraudulent activities and financial crime “more effectively, which is necessary if we are to keep up with the rapid technological advances and potential spillover of risks across the banking sector.”

Chu also noted that these skills and capabilities are particularly important with the rising popularity of online shopping and digital banking; there has been “a four-fold increase in complaints against banks in relation to scams and frauds over the past two years.”

Chu confirmed that their goal is to “enhance banks’ capabilities to detect bank account networks implicated in suspected fraud syndicates, early and efficiently.”

Chu also mentioned that the knowledge and experience participants will gain from this event will “help banks’ decisions about the most appropriate Regtech solutions to take their AML work to the next level; improve customer experience by reducing touch points in account opening and maintenance; and reduce risk displacement across the sector by expanding the group of banks deploying this tool.”

Chu concluded:

“AMLab provides a collaborative platform for banks and fintech community to promote the wider use of data and technology. Future AMLabs will look at other areas where Regtech can support banks’ gatekeeper role in the AML ecosystem and help safeguard customer accounts. We will announce further details nearer the time, and meanwhile, I hope you will find this one enjoyable, challenging and productive.”


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