The Hong Kong Monetary Authority (HKMA) has developed a two-year roadmap to promote Regtech adoption in the Hong Kong banking sector, as laid out in a White Paper entitled “Transforming Risk Management and Compliance: Harnessing the Power of Regtech”.
Banks’ evolving business models, regulatory initiatives in response, and a challenging external environment continue to drive banks to explore the use of technology to enhance risk management and compliance. Against this backdrop, the HKMA commissioned an external consultant to explore the current state of Regtech in Hong Kong, examine common practices and barriers to adoption, and outline a roadmap to accelerate adoption in the banking sector.
The HKMA’s Regtech roadmap is developed with reference to the recommendations in the white paper. The 16 recommendations span five core areas: -
To implement the recommendations, the HKMA will roll out a series of events and initiatives in the coming two years, including: -
Mr Arthur Yuen, Deputy Chief Executive of the HKMA, said, “The HKMA has been promoting fintech adoption since the announcement of our seven Smart Banking initiatives in 2017. The resulting development in fintech has been phenomenal. We are now putting the same emphasis on Regtech considering its pivotal role in revolutionising risk management and compliance. The banking industry should seize the opportunity to capitalise on the benefits of Regtech. The HKMA’s two-year roadmap will help to build a thriving ecosystem, transforming Hong Kong into a Regtech hub.”
Implementation of the 16 recommendations will reinforce the HKMA’s earlier work in promoting Regtech development such as opening up the Fintech Supervisory Sandbox and Chatroom to Regtech projects and ideas in 2018, the “Regtech Watch” newsletter series and the “AML/CFT RegTech Forum” in 2019.
A summary of the white paper and the consultancy study can be found at the Annex.
Hong Kong Monetary Authority
3 November 2020