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Fairness reminder issued to banks

December 06, 2017

Banks have been reminded not to unreasonably impede access to banking services by legitimate businesses and ordinary citizens while implementing robust regulatory measures.


Secretary for Financial Services & the Treasury James Lau told legislators today the Monetary Authority received 117 complaints concerning account closures by banks in the first 10 months of this year.


In most cases, banks closed the accounts due to suspicious transactions, or because the customers were not able to provide required information during the monitoring process.


Mr Lau said strengthened international efforts in combating money laundering and terrorist financing in recent years have led the local banking industry to adopt a more comprehensive customer due diligence process.


He said most of the complaints are related to an international banking group and the authority has asked that group to improve customer communication to meet the "Treat Customers Fairly" principle.


The authority also reminded the banking industry to handle cases in a risk-based manner.


Mr Lau said: "Banks should conduct customer due diligence measures in a proportionate and pragmatic manner having regard to the different backgrounds, circumstances and risk levels of customers.


"The risk-based approach is not meant to be a 'zero failure' regime, which means banks are not expected to implement (an) overly stringent customer due diligence process with a view to eliminating, ex ante, all risks."


The authority will conduct decoy operations to assess the improvement in bank account opening services, share good and bad practices with the industry and explore how technology can boost service efficiency.

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