Hong Kong Banks Exceed Expectations in Fighting Online Fraud

Banks in Hong Kong are exceeding expectations in taking full responsibility and reimbursing lost funds after fraud incidents related to online banking and financial apps, according to a survey by financial technology company FIS.

The survey found that 53% of respondents reported their banks assumed full responsibility and fully reimbursed funds lost in cases of fraud, such as unauthorized account access or the theft of personal and financial information. This result was higher than the 44% who initially expected banks to assume complete responsibility, FIS noted.

Over a third of respondents experienced partial refunds and shared responsibility, while about 10% did not receive any reimbursement, as their banks accepted no responsibility for the fraud.

In comparison, the same survey conducted in Singapore showed that 53% of consumers expected banks to take full responsibility, but only 51% saw this expectation met with complete reimbursement.

Fraud and scams have been a growing concern in Hong Kong, with financial losses soaring 66.5% year-on-year to HK$4.48 billion (US$575 million) in the first six months of this year, according to police data. Losses from online fraud rose 29% to HK$2.56 billion over the same period, involving 12,403 cases.

The FIS survey revealed that nearly one in four Hong Kong residents has fallen victim to fraud related to online banking, with millennials (aged 28-42) being the most affected. By contrast, older generations, particularly those aged 59 and above, experienced the fewest incidents, likely due to lower usage of online banking services.

In response, banks in Hong Kong have introduced additional security measures for fraud prevention but must balance these enhancements with the need to avoid inconveniencing customers.

The survey highlighted that a “money lock” feature to prevent unauthorized withdrawals emerged as the most sought-after innovation, with 65% of respondents rating it as highly important—surpassing other features like cardless withdrawals and voice-activated virtual assistants.

In April, Citigroup became the first bank in Hong Kong to launch an emergency e-banking service lock, allowing customers to temporarily disable access to transaction services via app if they suspect unauthorized access.

The increasing sophistication of scams and fraud underscores the need for banks and financial institutions to collaborate closely with solution providers to develop more robust defenses and innovations.