Norman T L Chan: HKMA and the protection of bank customers Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the KPMG Luncheon Talk, Hong Kong, 11 July 2013. *  *  *  Ayesha (Macpherson Lau), distinguished guests, ladies and gentlemen, First of all, let me thank Ayesha and KPMG for inviting me to this Luncheon Talk. When I took up the post of the Chief Executive of the HKMA in 2009, we were faced with the aftermath of the Lehman Brothers saga. As most of you would remember, there was immense public pressure on enhancing the protection of consumers and investors. My colleagues in the HKMA and I have regarded this as one of our priority areas and we have put our hearts and souls into strengthening our regime on banking conduct supervision in the past few years. In 2010, I set up two new departments, namely the Banking Conduct Department and the Enforcement Department, within the HKMA. These are important milestones in the development of the HKMA, and we have indeed turned a new page in protecting bank customers, be they consumers or investors. I would like to take the opportunity of today’s luncheon talk to share my thoughts on this. Why should we provide protection to bank customers? First, let me pose a question “Why should we provide protection to bank customers?” The answer is quite simple.
So the message is: consumers of financial services have to be responsible for the decisions they make and the consequences of such decisions. Think twice before you sign on the dotted line. Conclusion To conclude, the key takeaways are: •  banks must treat customers fairly by looking after their interests and not treating them just as target of sales; and  •  bank customers must learn to become “smart” as well as “responsible” consumers of financial services. Then how do we go about in achieving these two objectives? For banks, the HKMA will ensure that there is a set of robust but fair rules governing banking conduct. We will enforce these rules vigorously through on-site examinations and off-site surveillance. We will investigate and, if appropriate, take enforcement action against breaches when they are reported by customers or detected by the HKMA. But we appreciate no external forces can be as effective as internal controls and culture in guarding against breaches. We therefore consider it important for the boards and senior management of banks to share and cherish the same value as we do in terms of treating customers fairly.