TBML case study features in HKMA’s new report on innovative Regtech AML/CFT approaches

The Hong Kong Monetary Authority (HKMA) has published a new report containing case studies on and insights into how banks are seizing opportunities to leverage regulatory technology (Regtech) to enhance the effectiveness of their anti-money laundering and counter financing of terrorism (AML/CFT) strategies.

The report features a case study demonstrating how one bank unearthed trade-based money laundering (TBML) by employing innovative network analytics (Trade Based Financial Crime, 25 January 2021, Bank employs innovative Regtech network analytics to unearth serious TBML case).

Practical handbook

AML/CFT Regtech: Case Studies and Insights describes industry practices and insights that all banks can use to assess how the changing technology landscape in financial services will impact their exposure to AML/CFT risks, and whether Regtech applications are right for them now or in the future.

The report shares insights from early adopters of AML/CFT Regtech and focuses on industry case studies to illustrate various approaches that different banks have taken to address a number of common themes across the experiences of pioneer banks.

Remote on-boarding

The challenging operating conditions created substantially by the coronavirus crisis have triggered accelerating Regtech exploration and adoption, particularly in the provision of remote services according to the report.

It says 90 per cent of all retail banks have either launched or plan to launch remote on-boarding for individuals using Regtech solutions while the authority reports strong growth in testing remote customer on-boarding initiatives for corporates through its own Fintech Supervisory Sandbox.

Widespread uptake

Of the banks HKMA has been working with over the last 12 months, 80 per cent of accelerator banks – those at an early stage of the adoption cycle – are now using or planning to use AML/CFT Regtech solutions.

Meanwhile 77 per cent of enabler banks – which had explored implementing machine learning in transaction monitoring and screening – are now either using it, conducting proofs of concept, or have concrete plans to do so.

Key insights

The report describes these results as encouraging but there is still more to be done.

Banks that have already adopted AML/CFT Regtech emphasise a number of key insights, including the importance of early and continuing stakeholder buy-in and the need for interdisciplinary adoption teams with broad perspectives.

Regtech adopters also stress the value of forums to share views and experience and

the ability to track and measure success.

HKMA’s report, AML/CFT Regtech: Case Studies and Insights, can be downloaded from here.

Categories: Trade Based Financial crimes News

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