HKMA seeks bank sharing of personal account information in war against financial crime

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HKMA will submit a bill that would allow banks to share information among themselves on personal accounts that raise red flags

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Enoch Yiu

Published: 6:27pm, 7 Oct 2024Updated: 6:31pm, 7 Oct 2024

Hong Kong’s monetary authority is pursuing legislation that would provide greater transparency into personal bank accounts, a far-reaching move aimed at combating financial crime and cracking down on fraud.

Next year, the Hong Kong Monetary Authority (HKMA) and the government will submit a bill that would allow banks to share information among themselves on personal accounts that raise red flags.

In June 2023, Hong Kong introduced the Financial Intelligence Evaluation Sharing Tool (FINEST) for banks to exchange information about suspicious corporate accounts, but they cannot transmit details on personal accounts due to privacy laws.

“If personal account information is included in the scope of FINEST, its ability to prevent and detect crime will be greatly enhanced, since an estimated 90 per cent of suspicious accounts used in money laundering-related fraud are held by individuals,” said Raymond Chan King-wang, executive director of the HKMA, at a Legislative Council meeting on Monday.

The legal change would also make it easier for banks to file suspicious transaction reports and will support them in their ability to freeze illicit funds.

“This will enhance the overall quality of suspicious transaction reports by combining information from different banks, as information from one bank may help explain activities that another bank has identified as suspicious,” Chan said.

Chan said an information exchange among several banks has helped to identify a religious organisation that became a victim in a HK$1 billion (US$128.8 million) fraud case. After making a report to the police, the banks helped it to recover HK$800 million.