Fubon Bank Fined by HKMA

In a significant regulatory action, the Hong Kong Monetary Authority (HKMA) has imposed a fine of HK$4 million on Fubon Bank following serious deficiencies in its transaction monitoring systems. This penalty comes after the bank itself reported the failures, triggering an investigation by the authorities.

Investigation Findings

The HKMA's investigation revealed alarming shortcomings in Fubon Bank's approach to monitoring its customer relationships. Between April 2019 and July 2022, the bank neglected to implement effective procedures for continuously overseeing its business dealings with clients, which is crucial for identifying and mitigating risks associated with money laundering and terrorist financing.

Specific Deficiencies

Specifically, the authority found that Fubon Bank failed to effectively manage system changes and did not adequately follow up on a notable drop in transaction alerts. Furthermore, the bank did not regularly review the range of transactions monitored by its transaction monitoring system. This lack of diligence extended to the scrutiny of individual transactions, as well as timely updates to customer due diligence reviews triggered by significant events.

Regulatory Insights