Given the recent developments in fintech and the evolution of digital banking, we will shortly be consulting the industry and the fintech community on whether and if so how the Guide to Authorization of Virtual Banks promulgated in 2000 should be amended to suit the present day circumstances. (D)  Banking Made Easy  Another component of the new Smart Banking era is our “Banking Made Easy” initiative. We will set up a new task force within the HKMA and work with the banking industry to identify and, where appropriate, modify or streamline those regulatory requirements or processes that may hinder technological innovations. We will seek to clarify regulatory expectations, review our own guidance and rules to make them more user friendly, thereby facilitating innovations in products and services for better customer experience. Remote onboarding of customers and account maintenance are two such examples in which the use of new technology may lower operating costs and improve customer experience. We will also initiate legislative changes in our antimoney laundering laws and regulations so that a more risk-sensitive approach to remote customer onboarding can be undertaken. We and the Hong Kong Association of Banks are now studying how to use know-your-customer (KYC) utility to conduct customer due diligence processes more efficiently. The HKMA is also considering the introduction of multiple tiers of bank accounts so that the process required for opening accounts for the low risk banking services can be simplified.

Enhanced tax transparency lifts the veil on structures created for illicit purposes, and will help to deter tax criminals from abusing trust structures. This bodes well for the longer term sustained growth of the trust industry. The critical role of industry 24. An AML/CFT regime, no matter how robust, cannot in itself fight against ML/TF activities. We need the commitment and active participation of the industry. Promoting a strong AML/CFT culture within the industry, and deepening manpower capabilities are important elements to maintain a robust regime, and allow us to reap the benefits of business growth while managing risks effectively. 25. Industry has primary responsibility to build a good AML/CFT culture and ensure compliance. I am encouraged that the industry has taken active steps to promote robust controls to strengthen its resilience and prepare for increased transparency on beneficial ownership information and enhanced tax transparency. The private banking industry in Singapore introduced a set of industry sound practices last year to provide guidance to private banks on the development and implementation of robust controls to detect and deter the proceeds of tax crimes. As most of you would know, the Singapore Trustees Association has also issued similar guidelines for trust companies. We commend such industry initiatives and look forward to continue working in meaningful partnership with the industry. 26. Competency building is also imperative in raising AML/CFT standards amongst industry professionals. An effective AML/CFT system cannot be solely the responsibility of compliance professionals or experts, but must be an integral part of the firm’s culture.