AML Regtech: Network Analytics

The Hong Kong Monetary Authority (HKMA) published today (9 May) a report titled “AML Regtech: Network Analytics”, promoting the adoption of network analytics capability to strengthen the response of banks’ anti-money laundering (AML) systems to deception and other financial crimes.

The HKMA continues to work closely with banks and stakeholders in the ecosystem to introduce innovative ways of reducing and preventing the harm and losses from fraud and financial crime¹. 

This report highlights the potential of combining intelligence-led analytical tools with rules-based monitoring systems, which will help banks to enhance anti-deception efforts in the prevention, detection and disruption of financial crime. It also shares the experiences of banks already using this capability, and provides practical insights and expert perspectives, guiding banks in their exploration and adoption of network analytics. Leveraging increased intelligence shared through the Fraud and Money Laundering Intelligence Taskforce (FMLIT)², this capability has already resulted in banks increasing the number of intelligence-led suspicious transaction reports by 319% in 2022 compared with 2021, leading to an increase of 113% in criminal proceeds restrained or confiscated.

Mr Eddie Yue, Chief Executive of the HKMA, said, “Fraud prevention and detection is a common purpose and priority the HKMA shares with all stakeholders in the ecosystem including banks and law enforcement agencies. Working collaboratively, we will scale up the use of data and technology in the fight against abuse of financial system by fraudsters and criminals, with a view to maintaining safety and efficiency of our banking system. This important work is part of the HKMA’s ongoing strategy to promote Regtech adoption by banks in order to enhance their AML system effectiveness and reduce the harm from deception and other financial crimes.”

Under its “Fintech 2025” strategy, the HKMA will continue to support innovation and banks’ Regtech adoption in promoting an ecosystem response to deception, including co-hosting a further AMLab with Cyberport, which will involve all retail banks and feature a deep dive into the technology and data requirements underpinning anti-deception efforts.

Hong Kong Monetary Authority

9 May 2023

¹This includes the sharing session on anti-deception efforts, jointly hosted by the HKMA and the Hong Kong Police Force (HKPF) on 21 April 2023, which discussed various opportunities to use technology and data analytics to enhance the ecosystem response to fraud.

²Established in May 2017, the FMLIT is a public-private partnership for information sharing among the HKPF, the HKMA and 23 banks.