HKMA’s Yuen details regtech projects: robo rulebooks and pivot to suptech

Excerpts from speech by Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority, at HKIB Annual Banking Conference 2018, Hong Kong, 27 September 2018

Let me highlight some of the positive responses we have observed in respect of these Smart Banking initiatives:

  • We have seen the launch of more than 70 major digital banking and fintech initiatives from various banks since the announcement of the seven initiatives last year. There were more than 20 projects related to mobile payments; 12 biometric authentication initiatives using different biometric attributes, such as fingerprint, finger-vein, voiceprint and facial features; 7 software security tokens; and 30 others, including chatbots powered by artificial intelligence, and enhanced financial services leveraging distributed ledger technologies and social media platform ntegration.
  • In addition, we already had the successful launch of remote onboarding services in Hong Kong, and more than 10 banks are preparing to launch similar services. Also, around 10 banks plan to launch online personal lending services that leverage machine learning technologies and data analytics.
  • More than 70 firms, including local and overseas technology and financial firms, have expressed interest in establishing virtual banks in Hong Kong. As of 31 August, we have received about 30 applications to operate a virtual bank. Some of those applications are already “substantially complete”, so we would include them in the first batch of applications for processing. We expect to start granting licences to virtual banks around the end of this year or early next year.

.Recognising the growing need for, and developments of, regtech solutions, we at the HKMA consider it timely to work with the banking industry and the technology community to further facilitate the adoption of regtech in Hong Kong. To help develop the Regtech ecosystem here, the HKMA will open the Fintech Supervisory Sandbox to regtech projects or ideas raised by banks or tech firms.

The HKMA will soon launch a series of regtech-specific projects, focusing on four areas:
(a) AML/CFT (anti-money laundering and countering financing of terrorism) surveillance technologies;
(b) Regtech for prudential risk management and compliance;
(c) Study on machine-readable regulations; and
(d) HKMA’s exploration of suptech.

Read the full speech

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