CYBERSECURITY
image

Cybersecurity

Cybersecurity platform to expand to Hong Kong’s brokers and insurers

Having launched a system to protect banks, ASTRI is now in talks with insurance and securities regulators to create similar systems

PUBLISHED : Monday, 05 June, 2017, 10:01pm
UPDATED : Monday, 05 June, 2017, 11:18pm

The government agency that promotes financial technology in Hong Kong is working with insurance and securities regulators to expand its cybersecurity network to cover those industries.

The move by the Applied Science and Technology Research Institute (ASTRI) comes after it teamed up with the Hong Kong Monetary Authority to create a system to protect the banking industry from cyberattacks.

“After launching a cybersecurity platform with HKMA last year for banks, we are now in initial talks with the Hong Kong Federation of Insurers and the Securities and Futures Commission to establish similar platforms for insurance companies and securities firms to help them to defend themselves from cyber risks,” said Frank Tong Fuk-kay, chief executive of ASTRI.

ASTRI and HKMA in December launched a platform for all 156 banks in Hong Kong to share information when they become aware of hacker attacks and other cybersecurity threats.

Tong said the platform had proved popular with lenders and now ASTRI will work with the HKFI and the SFC to create similar networks for the insurance and brokerage industries. Next year, he would like to expand the system to other sectors such as hospitals.

The SFC last month proposed a range of measures for all 500 stockbrokers to step up their cybersecurity after 27 hacking attacks on 12 licensed financial firms in the 18 months to the end of March led to investor losses totalling HK$110 million (US$14.2 million).

Ashley Alder, chief executive of the SFC, said: “Hacking of internet trading accounts is the most serious cybersecurity risk faced by internet brokers in Hong Kong.”

Christopher Cheung Wah-fung, founder of Christfund Securities and a lawmaker representing the financial services sector, welcomed ASTRI and the SFC working together on a cybersecurity network for brokers.

“It is a fact that there are more and more cyber attacks in internet trading. It would be good to have a platform for all brokers to share information and to join hands to defend the interests of the customers from hackers attacks,” Cheung said.

It would be good to have a platform for all brokers to share information and to join hands to defend the interests of the customers from hackers attacks
Christopher Cheung, lawmaker for financial services

Besides security, Tong said ASTRI has worked with banks to use blockchain and other technologies to improve their trade finance and mortgage business, reduce fraud and enhance cost efficiency.

The use of blockchain prevents documents from being tampered with and reduces paperwork that could cut the time taken to process mortgage applications or trade finance by up to 50 per cent.

“This would help banks to provide a better service and save more costs,” Tong said, adding that HSBC, Bank of China (Hong Kong) and Bank of East Asia have already introduced some of these services.

ASTRI will also work with banks to introduce identification methods that use facial or speech recognition instead of passwords to identify clients.

“These would help prevent fraud and would help crack down on money laundering. But we also respect clients’ privacy and so there would be no mandatory requirement for clients to use these identification methods. We would just allow bank customers to have a choice,” he said.

Tong rejects suggestions that Hong Kong is lagging behind Singapore in the field of fintech.

“Hong Kong and Singapore each have their own areas of advancement in developing fintech. Singapore has more incentives to encourage starts-ups while Hong Kong is the first market in Asia to use blockchain to do mortgage business,” he said.

Tong said what should be of concern is the lack of talent in the sector.

“When compared with markets such as the US, Hong Kong does not have that much talent in technology and innovation. This is something we would need to step up in future,” he said.

business-article-page