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Cybersecurity and financial crime compliance are key focus areas for financial institutions in Hong Kong...

Cybersecurity and financial crime compliance are key...

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Cybersecurity and financial crime compliance are key focus areas for financial institutions in Hong Kong, finds KPMG report

Key focus areas for financial institutions in Hong Kong include cybersecurity and financial crime compliance, while increased adoption of automation and innovative technologies will help drive sustainable change, a new KPMG report finds.

KPMG’s new publication, titled Ten Key Regulatory Challenges for 2018, highlights that while the pace of regulatory change and introduction of new rules has slowed over the last few years, challenges for financial services firms globally remain as high as ever. Regulators will continue to expect an overall strengthening of core risk management governance, controls and reporting in 2018.

In Hong Kong, cybersecurity and financial crime compliance are among key priorities for financial institutions.

Paul McSheaffrey, Partner, Head of Banking and Capital Markets, Hong Kong, KPMG China, says: “Hong Kong has to date not had a significant data leak or cybersecurity incident but institutions should not be complacent. There is a need to continue to strengthen governance and also conduct threat assessments of where attacks could come from.”

Also on the agenda is financial crime compliance, with an upcoming visit from the Financial Action Task Force (FATF) later in the year to evaluate the strength of Hong Kong’s approach tackling financial crime.

McSheaffrey adds:  “Given the FATF’s initiatives, we expect anti-money laundering (AML) will remain a top priority for everyone. We are seeing a real demand from clients for technology solutions to help improve and automate parts of their AML processes.”

Meanwhile, financial institutions are actively looking to streamline or automate their compliance functions. Many of them have had to grow these functions significantly to help manage the risk of non-compliance from new rules, and they are now looking ways to increase efficiency. 

Hong Kong regulators are also expected to increasingly use technology, in particular data analytics, to facilitate supervision.

McSheaffrey concludes: “They are set to use it more widely in their supervision and examinations in 2018. The implications for financial services institutions is that they will need to ensure they strengthen their management of data and really understand how it is gathered, stored, used and reported.”

 

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About KPMG China

KPMG China operates in 16 cities across China, with around 12,000 partners and staff in Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located. 

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies. 

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