Management Summary
- Purpose / Background: The HKMA’s *Complaints Watch (Issue No. 28)* provides an analysis of complaint trends for H1 2026. It serves as a regulatory guide to promote conduct standards and prudent business practices, highlighting emerging issues and areas for operational improvement within Authorized Institutions (AIs).
- One-line conclusion: Complaints rose by 22% YoY; AIs must modernize rigid operational processes to meet digital-era customer expectations while maintaining a sympathetic approach to customers in financial distress.
- Key Changes:
- Total complaints reached 2,310 (up 22% YoY).
- Significant surge in "Operation of Banking Accounts" complaints (up 64% to 986 cases) due to enhanced account monitoring and anti-fraud intelligence sharing.
- "Service Quality" complaints decreased by 8% (282 cases).
- "Lending Practices" complaints decreased by 25% (60 cases).
- Key Dates / Deadlines: None explicitly stated, but ongoing process reviews are expected.
- Applicability / Impact scope: All Authorized Institutions (AIs) in Hong Kong, particularly those with digital banking services and those conducting enhanced AML/fraud-related account monitoring.
- Recommended management actions:
- Review operational policies to ensure digital-era flexibility (e.g., accepting verbal/digital authorizations where risks permit).
- Evaluate and compress turnaround times for remediation processes, such as the correction of inaccurate credit reference records following identity theft.
- Implement a "sympathetic approach" framework for customers in financial distress to prevent unnecessary defaults.
- Enhance frontline staff awareness regarding existing internal policies and discretionary powers to improve first-contact resolution.
- Ensure internal monitoring of account review procedures aligns with customer service standards to mitigate friction during AML/fraud investigations.
Detailed Summary
- Document overview
- Nature: Regulatory educational newsletter/feedback report.
- Purpose: Disseminate trends, case studies, and HKMA expectations to drive continuous improvement in AI conduct and service standards.
- Main requirements
- Financial Distress Support: Banks should proactively assess the holistic circumstances of distressed customers (e.g., investment scam victims) rather than relying solely on rigid contractual enforcement.
- Digital-Era Service: Operational procedures must evolve to match digital expectations. Rigid requirements for physical documentation (e.g., for simple fund returns) should be reconsidered where digital verification is feasible.
- Resolution Timelines: Banks must review processes to shorten response times for sensitive customer issues, particularly the correction of credit records following fraud.
- Key changes
- Trends: Increase in account operation complaints driven by Police-Bank intelligence sharing.
- Success Metric: Approximately HKD 95.8 million in suspected crime proceeds intercepted from 5,938 accounts in H1 2026.
- Important dates & transition
- Reporting Period: January – June 2026.
- Publication: July 2026.
- Impact and risks
- Operational: Increased volume of complaints tied to fraud prevention measures requires careful balancing of AML compliance and customer experience.
- Reputational: Rigid adherence to "outdated" physical processes creates avoidable customer friction and regulatory scrutiny.
- Financial: Proactive interest rate adjustments and repayment restructuring can prevent default, benefiting both bank asset quality and customer retention.
- Compliance action checklist
- Audit current "Account Operation" procedures to identify unnecessary physical documentation requirements.
- Conduct a stress test on the "Credit Record Correction" workflow to ensure timelines are minimized.
- Update training modules to empower staff with knowledge of internal discretion/exceptions for distressed customers.
- Appendices/attachments summary
- Complaint Statistics Table (Table 1/Chart 1): Provides a granular breakdown of 2,310 complaints, highlighting a 64% surge in "Operation of Banking Accounts" and a 45% increase in "Credit Card Issues," contrasted by a 25% decline in "Lending Practices" complaints. This serves as the primary data benchmark for AIs to assess their relative performance in these categories.