Legislative Council's Key Action on Financial Intelligence in Banking Sector

Legislative Council Initiatives on Financial Intelligence

In a pivotal move, the Legislative Council of Hong Kong has approved measures aimed at enhancing the financial intelligence evaluation sharing tool (FINest). This initiative facilitates banks sharing information about personal accounts that exhibit suspicious activity, which is crucial in combating financial crime.

New Legislative Measures

The Hong Kong Monetary Authority (HKMA) plans to pursue a critical amendment to the banking ordinance, aiming to provide greater transparency in financial transactions. Raymond Chan King-wang, HKMA's executive director, emphasizes that personal account details must be included in the scope of FINest to effectively tackle money laundering. Currently, privacy laws prevent sharing such information, limiting the tool's effectiveness.

Impact on Fraud Cases

• The proposed changes would streamline the process for banks to file suspicious transaction reports.
• Recent police data shows a staggering 66.5% increase in financial losses due to fraud within the first half of 2024.
• Reports indicate financial crimes almost doubled in value to HK$9.18 billion compared to the previous year.

Balancing Privacy Concerns

While lawmakers have welcomed the amendments, concerns regarding data privacy remain prominent. Joseph Chan Ho-lim, acting secretary for financial services, highlighted the need for a careful balance between privacy protections and the need to prevent fraud.

Future of Banking Structure

The banking ordinance amendment will also lead to a simplification of the banking system's structure, cutting down tiers from three to two. This is expected to bring operational efficiency and enhance the robustness of the financial sector against fraud.