Hong Kong Central Bank Launches AML RegTech Platform

The Hong Kong Monetary Authority (HKMA), the territory’s central bank and financial markets regulator, launched an Anti-Money Laundering (AML) Anti-Money Laundering (AML) Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Read this Term) Regtech Lab (AMLab) on Friday. This will further enhance the adoption of regtech platforms and accomplish the regulator’s ‘Fintech 2025’ strategy.

The initiative was launched in collaboration with the local technology provider, Cyberport, and it is also supported by Deloitte, one of the big-four accounting firms.

The regtech product is targeted towards banks that address the risks of fraud-related mule accounts using Network Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Read this Term. Additionally, they can enhance data and information sharing through public-private partnerships.

“AMLab will strengthen banks’ capabilities to protect customers from fraud and financial crime losses, reduce risk displacement across the banking sector and raise the overall effectiveness of the AML ecosystem,” the regulator explained.

Curbing Money Laundering

At first, a group of five banks will participate in the program and work towards enhancing the new system's capabilities.

They will use synthetic data to identify money mules, integrate alternative data into traditional datasets, and work in the development of further capabilities for the application of network capabilities in identifying money laundering risks.

“AMLab series will provide a collaborative platform for ongoing peer group sharing of operational, hands-on experience of Regtech approaches, focusing on solutions such as machine learning in the transaction monitoring process, low/no code workflow automation solutions, in addition to network analytics,” the central bank added.

Meanwhile, the HKMA is exploring the idea of a central bank digital currency (CBDC) and recently published a technical whitepaper for a digital Hong Kong dollar (e-HKD) that can be used in both domestic and cross-border markets.