HKMA’s AMLab series with Cyberport: A digital response to fraud
The Hong Kong Monetary Authority (HKMA) and Cyberport co-hosted the third Anti-Money Laundering (AML) Regtech Lab (AMLab 3) today (24 November), with support from Deloitte. The AMLab series strengthens banks’ capabilities to protect customers from fraud and financial crime losses by encouraging innovation and Regtech adoption, providing the most relevant knowledge and unique access to industry experts and service providers.
AMLab 3 builds on AMLab 1, using network analytics to combat fraud risk and reduce losses from scams using mule account networks. AMLab 3 shares good practices and provides a platform for banks as well as data and technology experts to collaborate using synthetic data to demonstrate testing of network diagrams, and thus helping fast track implementation at lower costs. AMLab 3 is also followed by Regtech Connect, an initiative introduced in July 2022, in which Cyberport technology companies demonstrate relevant Regtech tools and services, providing a collaborative platform for open discussions with participating banks.
In the face of rising levels of online fraud and financial crime, the HKMA has transformed the way it works with banks to shape the direction of innovation in AML work. A key element is the adoption of network analytics by retail banks, which is progressing well. About 60% of retail banks are now deploying network analytics, more than twice as many as three years ago, including banks which participated in AMLab 1 and which have partnered with Cyberport community companies. In the first nine months of 2022, retail banks1 increased their identification and reporting of suspicious accounts and networks by 127% compared to a year ago, leading to an increase of 166% in the amount of criminal proceeds restrained or confiscated by law enforcement agencies.
The HKMA will continue to engage with banks in 2023, including hosting more AMLabs with Cyberport and publishing research and thematic review results, under its “Fintech 2025” strategy and its commitment to safeguard stability and integrity of banking system in support of economic and business development.
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