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HKMA Issues Guide for Regtech Adoption in Customer Monitoring

Richard Marley
July 27, 2021
2 minutes read
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The second guide published by the HKMA will allow banks to test their internal measures and infrastructure capabilities for the adoption of Regtech solutions.

As part of a two-year roadmap, the Hong Kong Monetary Authority (HKMA) has published its second issue, the Regtech Adoption Practice Guide, to promote the adoption of regtech solutions in the banking sector. The new issue follows the first guide, which focused on the adoption of cloud-based regtech solutions.

In January, the HKMA published case studies that highlighted the benefits of adopting regtech solutions, particularly for meeting Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance targets.

The new guide adds to the previous publication and focuses more on the benefits of adopting regtech solutions in the area of customer monitoring – a task that is necessary for banks to perform to stay AML/CFT compliant.

The guide states that these solutions are of the essence, as manual processes are becoming a thing of the past. Additionally, regtech solutions can enable banks to stay up-to-date and collect necessary information related to customers and their transactions.

“This information is essential to understanding whether the purpose and intended nature of the customer’s activities are commensurate with its risk profile and the nature of the business relationship”, the guide states.

The HKMA adds that while the adoption of advanced technologies such as machine learning and cognitive solutions is still in its emergent stage, they are the prime areas of growth.

HKMA Issues Guide for Regtech Adoption in Customer Monitoring – Regulation Asia: HKMA Issues Guide for Regtech Adoption in Customer Monitoring Regulation Asia https://t.co/GdiOxrrPNY pic.twitter.com/I6UF1tJGRc

— Financely (@financelygroup) July 27, 2021

The Guide also highlights the major bottlenecks and pain points that banks face during customer monitoring, which regtech solutions can easily address. Key developments in the industry and possible regtech applications are also outlined.

The Guide consists of practical guidelines that banks can follow to automate ongoing monitoring of customers.

The Regtech Adoption Practice Guide can be viewed here.

Disclaimer: No warranty is herein provided that the information contained in this document is accurate, up-to-date, and/or complete. In no circumstance(s), does such information constitute legal or any other advice. Any person who intends to use, rely, pass-on, or re-publish the information contained herein in any way is solely responsible for the same. We suggest to verify the information and/or obtain expert advice independently if required.

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The UK has published its first national risk assessment (NRA) of proliferation financing risks, following the collection of views and evidence from the government, private sector, and academic and research partners, highlighting the proliferation financing risks facing the UK.

The UK is one of the first jurisdictions to carry out such an assessment.

While the UK currently has robust practices in place for combating proliferation financing activities, malign actors involved in proliferation financing seek to exploit the UK’s stability in the global economy and international financial system. The act involves the use of funds for facilitating chemical, biological, radiological, and nuclear (CBRN) programmes which pose a threat to the UK’s national security objectives and threaten international peace.

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The UK’s financial sector is at high risk from proliferation actors. The UK’s financial services industry, particularly the banking and insurance sectors, is especially at risk

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Suggested Read: FATF Issues New Guidance on Mitigating Proliferation Financing Risk

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HKMA Issues Guide for Regtech Adoption in Customer Monitoring

Regulatory Approach to Merchant Onboarding

FATF’s Recommendations

6AMLD in the EU

Corporate Transparency Act in the US

How Shufti Pro is Helping Businesses Onboard Legitimate Merchants

In a Nutshell…

Let’s prove your

customer’s identity

with Shuftipro.

Let’s prove your customer’s

identity with Shuftipro.

HKMA Issues Guide for Regtech Adoption in Customer Monitoring

What is Merchant Verification?

Regulatory Approach to Merchant Onboarding

FATF’s Recommendations

6AMLD in the EU

Corporate Transparency Act in the US

How Shufti Pro is Helping Businesses Onboard Legitimate Merchants

In a Nutshell…

Let’s prove your

customer’s identity

with Shuftipro.

Let’s prove your customer’s

identity with Shuftipro.