Thank you, Deputy President. I speak in support of the passage of the Banking (Amendment) Bill 2025 (“the Bill”).
In 2024, the number of deception cases soared to nearly 45 000, which represented a more than double increase from 2021 and caused the public to have lost up to $9.15 billion. From time to time, there are news reports about elderly people being defrauded of all their money and students from the Mainland being defrauded of millions of dollars. It shows that Hong Kong is facing an unprecedented challenge of financial crimes.
While the current bank-to-bank information sharing platform applies only to corporate accounts, up to 90% of fraud-related activities are conducted using individual accounts. As banks are not able to share the transaction information of suspicious individual accounts, the loophole is exploited by fraudsters to transfer illicit funds between banks. The Bill seeks to plug the current loophole in the banking system by establishing a voluntary information sharing mechanism and providing “safe harbour” protection, thereby allowing banks to share critical personal information such as bank account numbers and information on transaction counterparties with other authorized institutions (“AIs”) on a voluntary basis when they become aware of suspected prohibited conduct such as money laundering and terrorist financing, so as to narrow the information gap.
Instant exchange of information to expedite the interception of illicit funds is made possible through the platforms designated by the Hong Kong Monetary Authority (“HKMA”), including the information sharing platform operated by the Police and the information platform operated by the Hong Kong Interbank Clearing Limited. The platforms are highly secure, with HKMA having full control over the processing of data, which will help enhance the filing of suspicious transaction reports and support law enforcement agencies’ combat against cross-boundary crimes.
Two types of procedures corresponding to different scenarios are provided under the information sharing mechanism to strike a balance between risk management efficiency and customer privacy protection. The “request/response” procedure is triggered by the initial awareness of suspicious activities, under which clarification is sought through communication with other AIs. When it comes to high-risk transactions, AIs will alert multiple banks immediately under the “notification on one’s own initiative” procedure, so as to provide a quick early warning, decimate the reaction time of fraudsters, and disrupt the movement of illicit funds to places outside Hong Kong.
For banks, participation in the voluntary information sharing mechanism will help strengthen their anti-fraud measures and boost customer confidence. Currently, 10 large banks and medium and small banks have participated, with a 75% coverage of corporate and individual accounts.
Voluntary information sharing mechanisms have already been introduced in the United States, the United Kingdom and Singapore. The amendments under the Bill are in line with the guidance of the Financial Action Task Force and the international trend of combating financial crimes. In the face of the increasingly rampant cross-boundary fraudulent activities, the Bill is useful in filling the information gap quickly, so that other banks can be alerted in a timely manner and intercept suspicious transactions upon receipt of the alert. Through this, the amount of money lost in deception cases can be reduced and the credibility of Hong Kong as an international financial centre can also be strengthened.
However, I would like to remind the Government of one point. I take the view that HKMA should encourage more banks to participate in the information sharing mechanism, and banks that do not participate should explain the reason for not participating. This is to prevent some banks from becoming the preferred banks for account opening by fraud syndicates and thus the accomplices of fraudsters due to their non-participation in the information sharing mechanism as pointed out by Mr CHAN Chun-ying. Therefore, a higher voluntary participation rate (e.g. 100%) is very important.
With these remarks, Deputy President, I support the Bill.