On Sep. 9, HKMA announced initiatives re use of artificial intelligence.
HKMA shared how artificial intelligence (AI) can enhance the effectiveness and efficiency of monitoring money laundering and terrorist financing risks.
Plus, steps by HKMA to advance AI use in authorized institutions monitoring processes.
Follows HKMA Nov. 2019 wrote to CEOs on high-level AI principles, see #66992.
Background
HKMA shared a list of high-level principles on AI with authorized institutions in 2019.
Since then, some institutions have adopted AI to enhance monitoring systems/controls.
Systems powered by AI take into account a broad range of contextual information focusing not only on individual transactions, but also active risk profile of customers.
These enhanced systems have proved to be more effective and efficient than conventional rules-based transaction monitoring systems commonly used by firms.
Initiatives
Initiatives are being taken to accelerate the use of AI in suspicious activity monitoring.
HKMA will organize a sharing forum in Nov. 2024 on how AI is being deployed, and establish a dedicated team to provide supervisory feedback and technical guidance.
Will also continue to gauge the interest of authorized institutions in applying AI.
Action
Authorized institutions with significant operations in HK should give due consideration to adopting AI in their money laundering and terrorist financing monitoring systems.
A feasibility study based on the authorized institution's current money laundering and terrorist financing risk profile and possible evolvement should be undertaken.
Based on review outcome, authorized institutions should formulate an implementation plan, taking into account data requirements outlined in recent guidance, see #208683.
Feasibility study/plan should be signed off at board level, submitted by end Mar. 2025.
HKMA will individually coordinate with authorized institutions on timing, format, details of feasibility study and implementation plan, with further engagement to follow.
In Nov. 2024, HKMA published speech about using AI for AML/CFT, see #234965.
