Key Developments
Hong Kong’s financial regulators are accelerating a tech-driven anti-money laundering (AML) transformation, leveraging AI and expanded data-sharing frameworks to counter digitally sophisticated crimes. Raymond Chan, Executive Director of Enforcement and AML at the Hong Kong Monetary Authority (HKMA), outlined the progress at Deloitte’s Financial Crime Symposium this week.

1. Data Sharing Gains Traction

Progress:

• Suspicious transaction reports surged 300% YoY in 2024 after intelligence sharing via the Fraud and Money Laundering Intelligence Taskforce (FMLIT).
• The Banking (Amendment) Bill 2025, now under legislative review, will extend safe-harbor protections to personal account data sharing by Q4 2025.

Expert View:
"Collaboration is no longer optional—it’s actuarial math," noted Deloitte Partner Chris Cheung, citing a 34% increase in confiscated criminal assets linked to FMLIT alerts.

2. AI Adoption Hits Tipping Point

Banking Sector Shift:

• 100% compliance from 48 systemic banks in Hong Kong to integrate AI into transaction monitoring (HKMA mandate, March 2025).
  • 18 banks actively scaling AI tools.
  • 21 banks targeting deployment by 2026.

Public Sector Tech:
HKMA and Hong Kong Police are co-developing a payment data analytics platform to mine underutilized transaction data—a model aligned with BIS recommendations.

Regulatory Warning:
"Deepfake frauds demand real-time defenses," Chan stressed, referencing the IMF’s 2024 report on synthetic identity risks.

3. Crypto Regulation Tightens

Dual-Track Approach:

• Virtual Asset Trading Platforms: Licensed under SFC since 2023 (FATF Travel Rule compliant).
• Stablecoins: HKMA’s upcoming consultation paper (June 2025) will address AML gaps in fiat-backed tokens.

Global Context:
Chan highlighted "regulator shopping" risks as criminals target jurisdictions with weaker crypto oversight—a concern echoed in the FATF’s 2025 Crypto Threat Assessment.

4. Lessons from Fintech Push

Precedent:
The "All Banks Go Fintech" initiative (2021–2025) saw:

• 75% of Hong Kong financial institutions adopt generative AI (per HKIMR data).
• HK$41 billion in SME loans facilitated via the Commercial Data Interchange.

Takeaway:
"Scale requires persistence," Chan concluded, pointing to smaller banks now testing tools in HKMA’s GenAI Sandbox.

Next Steps
Industry feedback is sought on HKMA’s stablecoin AML rules, with implementation expected by mid-2026. "This reset isn’t Hong Kong’s alone—it’s a global compliance imperative," Chan affirmed.

Bottom Line: A data-AI-regulatory triad is reshaping AML defenses, with Hong Kong emerging as a testbed for scalable solutions.