Bank runs in Hong Kong following introduction of facial recognition withdrawals in Macau


from Hang The Bankers:

Hong Kong’s ATM network has been hit with a surge in withdrawals by customers using China UnionPay bank cards in the wake of facial recognition technology being introduced at cash dispensing machines in Macau.

Monetary chiefs in Hong Kong have declined to deny or confirm information obtained by the South China Morning Post that ATMs have seen a “staggering’’ rise in withdrawals since the casino hub introduced the recognition technology in May as part of a bid to stem illegal capital flight from mainland China.

“The rise in ATM withdrawals in terms of volume and number has been staggering. The taps are gushing,” said a source with knowledge of the situation.

“It seems quite clear that as the introduction of ATM facial recognition technology in Macau has put the squeeze on cash dispensing withdrawals in Macau, the pattern of withdrawals has followed the path of least resistance – and that is to Hong Kong,” the source added.

The development follows a move by the Hong Kong Monetary Authority to instruct local banks to submit data on cash withdrawals by UnionPay cards throughout the city’s ATM network as the regulator cracks down on unauthorised capital outflow from the mainland.

Media reports – not denied by the authority – said the instruction meant commercial banks were required to submit data and documentation regarding the volume and timing of withdrawals by UnionPay cards for the first six months of this year.

Asked about the surge in withdrawals, a spokeswoman for the Monetary Authority said: “We are not in a position to comment on any dialogues of a supervisory nature. As such, we are unable to confirm or deny your story, and we are afraid you will have to rely on the trustworthiness of your own contacts to verify what you have heard.”

A spokesman for the Hong Kong Association of Banks said: “We regret to advise that we do not maintain the specific details that you are inquiring about.”

The Monetary Authority spokeswoman added: “The HKMA endeavours to enhance the security level of banking systems.

“We have been studying the applications of different technologies, including the feasibility, soundness and cost efficiency of facial recognition and other types of biometric authentication technologies, having regard to the technologies used in other jurisdictions.

“However, we have no plans to require ATMs to install facial recognition technology.”

The mainland authorities have been strengthening regulations since last year when a decline in the value of the renminbi led to widespread capital outflows.

Mainland people are allowed to withdraw up to 100,000 yuan (HK$117,000) in renminbi overseas and remit up to US$50,000 worth of foreign currency offshore annually, according to the country’s 2016 foreign exchange regulations.

Read More @