HKMA replaces its remote on-boarding circulars and updates PEP guidance for banks and SVF licensees

Implications for lenders

For lenders in Hong Kong that open accounts or loans remotely, the circular points to tiered limits for new customers and regular retesting of identity checks against deepfake attacks, which may change on-boarding flows and fraud losses. Lenders serving PEPs or their family members may need documented, risk-based and proportionate reviews, ahead of the HKMA's thematic examinations.

Implications

Facts

The Hong Kong Monetary Authority (HKMA) issued a circular titled 'Remote on-boarding of individual customers' on 3 September 2026 to all authorized institutions and stored value facility (SVF) licensees. It supersedes the circulars of 1 February 2019 on remote on-boarding of individual customers and of 24 May 2021 on remote on-boarding and iAM Smart; the 2020 circulars on corporate customers remain in force.

The circular rests on two principles. Where identity is obtained electronically, institutions must ensure the reliability of the documents, data or information, including by using technology to check that an identity document is genuine. They must also use appropriate technology to link the customer to the identity provided. Products and services should be proportionate to the customer's assessed money laundering and terrorist financing risk; the HKMA cites a tiered model in which features and transaction limits adjust to actual usage and behaviour. Solutions should be updated and recalibrated using fraud and scam intelligence shared by the HKMA and the Hong Kong Police Force, with deepfakes and AI-driven impersonation named as threats. The HKMA expects senior management oversight and a comprehensive review of existing remote on-boarding solutions. The circular sets no implementation date.

In a letter dated 28 August 2026 to the same institutions, the HKMA shared an updated second version of its Smart Tips on the Treatment of Politically Exposed Persons, first issued in November 2025. The tips say PEP requirements should not be read as stigmatising PEPs and call for proportionate measures that ensure fair treatment. Non-Hong Kong PEPs always require enhanced due diligence scaled to risk, while Hong Kong and international-organisation PEPs are generally treated as regular customers unless the risk assessment finds high risk. The same standards apply, proportionately, to family members and close associates, and enhanced due diligence includes reasonable steps to establish source of wealth and funds, senior management approval and annual reviews. New good practices include dedicated PEP teams and holistic relationship-based reviews. The HKMA said it would run thematic examinations later in the year to test implementation.

Analysis

Both documents update rules set several years apart. The remote on-boarding circular replaces guidance from 2019 and 2021 and names deepfakes and AI-driven impersonation as growing threats; the new text sets principles rather than prescribing tools and asks institutions to keep recalibrating against shared fraud intelligence. The PEP tips moved from a first version in November 2025 to a second version within a year, with supervisory testing to follow.

The direction is consistent with other recent HKMA steps. In October the HKMA launched a cross-boundary data validation platform with Chongqing for account and loan checks and issued AI supervisory guidance under its 'ART' framework. Together they point to identity assurance supported by shared data and technology, while asking institutions to apply proportionate, risk-based treatment to PEPs.

Counterpoints and uncertainties

The circular sets principles rather than technical standards, so how examiners judge 'appropriate technology' is not yet visible; findings from reviews may be stricter than the text. The circulars apply to authorized institutions and SVF licensees, not to licensed money lenders under the Money Lenders Ordinance, so non-bank lenders' practice may differ. The PEP letter asks institutions to 'consider' good practices, and how thematic examinations treat departures remains to be seen.