In my view this is the only reasonable way of dealing with cross-border problems without rolling back financial integration. Recent development of cross-border banking The structure of the financial services industry has gone through major changes over the past decades. Until some twenty years ago, banks were essentially national entities with  1  In terms of lending the Swedish banks’ market shares account for 80 per cent in Estonia, 53 per cent in Latvia and 60 per cent in Lithuania. 2  National Bank of Greece, Annual Report 2009. BIS Review 82/2010  15  most of their activities limited to their home market. Of course, many banks conducted international operations even earlier than this, but those operations primarily focused on wholesale markets and large corporate clients. Smaller companies and consumers have in principle been obliged to use the services offered by domestic banks. Today, banks run businesses across the globe. And through the existence of foreign-based branches and subsidiaries consumers can choose to buy services from banks that are headquartered in a completely different part of the world. The trend towards more cross-border banking is widespread, but much of the development is driven by large financial institutions in a few countries, notably the US, the UK, France, Germany, Japan and the Netherlands. 3 It has become an especially widespread phenomenon in Europe.
As a start, the HKMA will organise an “AML RegTech Forum” later this month to bring together the banking industry, technology firms and other experts to explore technological collaboration on AML/CFT issues. We hope this will give everyone more understanding of the critical pain points in banks’ AML/CFT work. 3/5  BIS central bankers' speeches  28. Meanwhile, the HKMA has embarked on its own digitalisation programme. This cuts across multiple functions, including banking supervision, anti-money laundering, financial stability surveillance, research and investment. 29. Where supervision is concerned, we have started a pilot to collect more granular data from banks. Such data will enable us to have a fuller and more up-to-date picture of banks’ business. The upshot for banks is that in time, this could have the potential of replacing many template-based regulatory reports and lessening the reporting burden on banks. 30. The HKMA’s digitalisation programme is a multi-year project that will fundamentally overhaul our IT and data infrastructure. We are working closely with technology consultants and service providers to explore new technologies, including Supervisory Technology, or SupTech. 31. In the background, we have strong support for innovation from the Hong Kong Government. The Government plans to roll out its electronic ID initiative, “iAM Smart”, in the fourth quarter of next year. Registered Hong Kong citizens will be able to use this service to authenticate their identity using their own mobile phone. And many financial institutions have already expressed strong interest in this for customer authentication for accessing financial services. 32.