The fourth Anti-Money Laundering Regtech Lab: supporting an agile, coordinated and strategic response to digital fraud and financial crime

The Hong Kong Monetary Authority (HKMA) has published a press statement to inform that Cyberport – a government owned organization tasked with spurring entrepreneurship, supporting startups, promoting strategic collaboration with local and international partners to drive industry development, and facilitating digital transformation in both public and private sectors – and the HKMA itself recently organized the fourth Anti-Money Laundering Regtech Lab (AMLab 4) in collaboration with Deloitte. The purpose of the AMLab series is to enhance capabilities in utilizing data and technology to effectively combat digital fraud and money laundering, which pose a threat to the banking system and undermine trust in digital financial services.
This latest AMLab focused on developing a sector-wide approach to real-time fraud monitoring in collaboration with retail banks, technology companies, and industry experts. This event also saw the participation of major Stored Value Facility (SVF) licensees for the first time. Several capabilities were explored during the lab:
1. Proactive detection of money mule accounts: Enhancing the early identification and alerts for potential victims of deception to safeguard against losses.
2. Promoting industry-wide adoption of AML Regtech tools: Increasing the effectiveness of real-time fraud monitoring by encouraging retail banks to utilize network analytics.
3. Best practices in data usage and a coordinated approach: Incorporating non-traditional data, such as digital footprints and customer behavior, into monitoring systems, and developing a coordinated approach in the area of digital fraud and money laundering prevention as far as the use of data is concerned.
The event also featured Regtech Connect, a collaborative platform where technology companies showcased and discussed relevant Regtech tools and solutions with participating financial institutions.
To conclude the HKMA notes that the regulator itself and financial institutions are „committed to innovating their response, including adoption of a consistent, coordinated approach to real-time fraud monitoring by all retail banks before the end of September 2023. The outcomes will be tracked against the HKMA’s 2023 work priorities1 as well as the five joint anti-deception initiatives announced recently by the HKMA and Hong Kong Police Force (HKPF)“.