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HKMA Forms AI Task Force to Aid AML/CFT Monitoring
The Hong Kong Monetary Authority (HKMA) is promoting the use of artificial intelligence (AI) in money laundering and terrorist financing (ML/TF) monitoring. They have formed a team to guide financial institutions in adopting AI-powered monitoring systems through their Fintech Supervisory Sandbox and Chatroom.
The HKMA encourages institutions to strengthen their monitoring systems due to the increasing sophistication of money laundering activities and the use of mule account networks. AI-powered solutions offer better efficiency and effectiveness than traditional methods by analyzing a wider range of information to identify suspicious activities. They also use past transaction data and customer risk profiles to improve their accuracy.
The HKMA plans to share success stories of AI adoption in November 2024 and will continue to support institutions in exploring AI for anti-money laundering and counter-financing of terrorism (AML/CFT) purposes. Financial institutions are advised to conduct feasibility studies on integrating AI into their systems and submit an implementation plan to the HKMA by March 2025. This plan must be approved by their board of directors before submission.
Raymond Chan, Executive Director (Enforcement and AML), said in a circular,
“The HKMA will communicate with AIs [authorised institutions] on an individual basis regarding the exact timing for the feasibility study and implementation plan and the format in which they should be provided, and will consider further engagement and follow up in due course.”
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