Hong Kong‘s banking regulator has directed all licensed banks to conduct a strategic review of their business models in response to accelerating digital transformation, with a focus on distributed ledger technology (DLT). Boards are required to formally approve a plan within six months.
The circular, issued by Hong Kong Monetary Authority (HKMA) Deputy CEO Arthur Yuen, sets out expectations for institutions to examine how DLT and other emerging technologies could reshape their core operations, rather than simply layering new tools over existing processes. Plans should address product offerings, revenue models, customer engagement, risk management and operations.
Banks are encouraged to use the HKMA’s Supervisory Incubator for DLT to run small scale, real world trials to test new business models. A selection of institutions will be asked to submit their strategic plans through the HKMA’s survey tool.
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