Asian fintech leaders to meet in Hong Kong to fight criminal exploitation of regulatory void
New alliance of central bankers and officials from across Asia urging proactive approach such as facial recognition to deter risks such as money laundering
Facial recognition technology is likely to be among innovations on the agenda when bankers, financial regulators and officials from across Asia gather in Hong Kong on Wednesday for a landmark summit.
The high-powered meeting comes as the race to regulate the fintech (financial technology) revolution is intensifying amid fears that a regulatory “vacuum” could be exploited by money launderers, fraudsters and underground bankers whose activities threaten national, regional and international financial stability.
Organisers of the summit to launch the Alliance for Financial Stability with Information Technology, also known as AFS-IT, say speakers and guests will include top-level representation across the banking, financial, technology and regulatory sectors as well as government officials from China, Hong Kong, Macau, the Philippines, Thailand, Cambodia, Myanmar, Vietnam, Brunei and Laos.
A key focus will be the fostering of innovation in regulation technology, or regtech, a new field in which information technology is used to enhance regulation. Innovative fintech can be used and adapted to benefit both service providers and regulators, and it includes know-your-customer facial recognition technology recently installed across the ATM network of casino hub Macau as part of an ongoing crackdown on money laundering and capital flight from China.
Last week the Post revealed the launch of the alliance, which is to be co-chaired by Anthony Neoh – the chief adviser to the China Securities Regulatory Commission and a former chairman of the Hong Kong Securities and Futures Commission (SFC) – Andrew Sheng, a fellow ex-SFC head who also served as deputy chief executive of the Hong Kong Monetary Authority; Clarie Lo, a former deputy secretary for Hong Kong’s Financial Services and the Treasury; and Anselmo Teng, a former chairman of the Macau Monetary Authority.
On Monday, Teng stressed the collaborative nature of the new alliance.
“A lot of hard work has gone into assembling a highly qualified and well-positioned group from across the Asian region to launch this important alliance,” Teng said.
“We need to adopt a proactive approach to deter risks brought about by fintech, such as money laundering, illegal cross-border fund flows and financial crime which affect financial stability,” he added. “The alliance intends to provide a platform for collaboration for the purpose of coming up with practical technology solutions.”
Peter Hatz, a director of the Hong Kong-based regtech company Veridate Financial, welcomed the alliance’s formation at a time when “unscrupulous” fintech operators were attempting to exploit a regulatory vacuum.
“The key point here is that it is only those behind unscrupulous ICOs (initial coin offerings) who do not want proper regulation,” Hatz said. “The scrupulous know that only with proper regulation comes long-term continuity and long-term financial stability. The regtech solutions are out there. They just need the will to be applied.”
The idea for the alliance first surfaced at a meeting of banking and financial regulators from the mainland, Hong Kong and Macau, at the casino hub in May last year.
Registered in Hong Kong, the group will have offices locally and in Macau, employing a small number of staff in each location at the start.
The alliance also aims to find ways of putting regulators “ahead of the game” amid mounting concerns over the proliferation of unregulated finance platforms and dubious cryptocurrency ICOs.