HONG KONG (Reuters) - A Hong Kong based NGO backed by regulators, former central bankers and government officials on Wednesday announced an alliance to fight money laundering and regulate the fast growing financial technology space across Asia.
The heavyweight meeting, which had government representatives from countries including China, the Philippines, Thailand and Cambodia, aimed to provide an information exchange platform as rapidly evolving technology makes it harder to regulate illicit money flows.
China has battled to curb capital outflows for years. The country’s special administrative regions of Hong Kong and Macau have been key places where capital has seeped out from. The gambling hub of Macau last year introduced facial recognition technology at ATMs to target the illicit outflows from mainland China.
Anselmo Teng, former head of the Macau Monetary Authority and co-chair of the Alliance for Financial Stability with Information Technology, told Reuters in an interview on Wednesday that “ATM cash withdrawals has dropped as a result of the KYC measures because it has effectively stopped this cross border illegal cash withdrawal activity.”
Teng, who retired from the Monetary Authority in August last year, added that the measures had been so effective that withdrawals had dropped to more than half of what they were previously.
Industry estimates had put the monthly withdrawal volume at HK$10 billion ($1.27 billion) from ATMs in the former Portuguese colony prior to the introduction of the facial recognition technology.
Since Macau introduced the new measures, withdrawals in Hong Kong have surged, prompting scrutiny from monetary authorities, the banking industry and police amid media reports that mainland Chinese are withdrawing hundreds of thousands of dollars using up to 50 cards at a time.
The HKMA said monthly cash withdrawals using mainland bank cards ranged between HK$2 billion and HK$6 billion in 2017.
Clarie Lo, co-chair of the Alliance and former Deputy Secretary of the Hong Kong government’s Financial Services and Treasury Bureau, said Macau’s experience could help other countries around Asia.
“Things like the experience from Macau will be very useful and beneficial for other jurisdictions around Asia which does not have this technology or knowhow to do so,”
Philippines special envoy to China William Lima said the group was looking at how to better regulate and form a safe way for remittances for the thousands of Philippine workers overseas back to the country.
Reporting by Farah Master; Editing by Kim Coghill