As a start, the HKMA will organise an “AML RegTech Forum” later this month to bring together the banking industry, technology firms and other experts to explore technological collaboration on AML/CFT issues. We hope this will give everyone more understanding of the critical pain points in banks’ AML/CFT work. 3/5  BIS central bankers' speeches  28. Meanwhile, the HKMA has embarked on its own digitalisation programme. This cuts across multiple functions, including banking supervision, anti-money laundering, financial stability surveillance, research and investment. 29. Where supervision is concerned, we have started a pilot to collect more granular data from banks. Such data will enable us to have a fuller and more up-to-date picture of banks’ business. The upshot for banks is that in time, this could have the potential of replacing many template-based regulatory reports and lessening the reporting burden on banks. 30. The HKMA’s digitalisation programme is a multi-year project that will fundamentally overhaul our IT and data infrastructure. We are working closely with technology consultants and service providers to explore new technologies, including Supervisory Technology, or SupTech. 31. In the background, we have strong support for innovation from the Hong Kong Government. The Government plans to roll out its electronic ID initiative, “iAM Smart”, in the fourth quarter of next year. Registered Hong Kong citizens will be able to use this service to authenticate their identity using their own mobile phone. And many financial institutions have already expressed strong interest in this for customer authentication for accessing financial services. 32.

Developments in the financial sector  Scale and size of the various markets Financial markets have expanded strongly in many countries, partly as a result of extensive deregulation in the financial sector in the 1970s and 1980s. Technological advances reduced the effect of regulation and have, together with institutional changes, made it possible for market participants to respond in improved and more efficient ways. Credit institutions’ total assets have increased sharply over the past few years in all countries in the comparison. Banks’ total assets, as a share of GDP, are not particularly high in Norway compared with other countries, even though banks are the main lenders to Norwegian households and enterprises. This may be because Norwegian banks extend few loans to the public sector and to foreign borrowers compared with banks in other countries, and because Norwegian enterprises borrow from foreign credit institutions more than enterprises in other countries. Banks’ total assets have increased while the number of employees and person-hours has declined. Productivity growth has been strong. Direct mediation of assets and liabilities through the securities market has also increased. Nevertheless, bonds and notes do not account for more than about 7 per cent of domestic debt. This share has remained fairly stable in recent years. Private enterprises borrow less in the domestic bond market than enterprises in other countries. Particularly in the US, lending through these markets is well established. The financial system in Norway is largely dominated by banks.