Guidance on Banking Services for Individuals with Higher Risk Profiles

55th Floor, Two International Finance Centre, 香 港 中 環 金 融 街 8 號 國 際 金 融 中 心 2 期 55 樓 8 Finance Street, Central, Hong Kong 網 址：www.hkma.gov.hk Website: www.hkma.gov.hk Our Ref: B1/15C B9/67C 27 May 2026 The Chief Executive All Authorized Institutions Dear Sir / Madam, Guidance on Banking Services for Individuals with Higher Risk Profiles I am writing to provide guidance to Authorized Institutions (“AIs”) in respect of banking services for individuals assessed as presenting higher risks. Access to basic banking services is integral to financial inclusion, enabling individuals to engage in economic activities efficiently and manage day-to-day financial transactions. Banking services are, to a large extent, accessible to members of the public in Hong Kong, including customers with different risk profiles. The Hong Kong Monetary Authority (“HKMA”) has reviewed the practices of some AIs in providing banking services for individual customers assessed as presenting higher risks (“higher-risk individuals”). These assessments may be based on a range of risk factors, such as past convictions, involvement in ongoing investigations or legal proceedings (including but not limited to those associated with money laundering and terrorist financing, or indications of potential involvement in fraudulent activities). While AIs are required to ensure that proper measures are in place to mitigate any identified risks, we note that in some cases, AIs’ approaches to managing banking services for higher-risk individuals have not adequately and effectively addressed their genuine needs for basic banking services in Hong Kong (for example, in the treatment of services for individuals in Hong Kong who are under investigation or being prosecuted, but have not yet been convicted of an offence).

The HKMA has explored with AIs options for mitigating higher risks that align with a risk-based approach to anti-money laundering and counter-financing of terrorism (AML/CFT) efforts, while upholding the principle of financial inclusion. Following consultation with the industry, we have set out practical guidance on the provision of banking services to higher-risk individuals in the Annex, having regard to both AML/CFT and financial inclusion considerations. In particular, the HKMA encourages AIs to consider offering basic banking services to higher-risk individuals residing in Hong Kong, subject to appropriate safeguards and limitations, to manage the associated risks. Such service arrangements should only be applied in circumstances where a broader range of banking services may not be appropriate due to the level of risk exposure, in line with the intention to support access to basic banking services for higher-risk individuals residing in Hong Kong who have genuine banking needs on a case-by-case basis, while mitigating associated risks. These service arrangements should not be applied as a matter of course to customers solely on the basis of a higher-risk classification. AIs are expected to take into account the expectations set out in this Circular and determine their implementation approach based on their risk assessments, including the range of services to be offered, the extent of safeguards and limitations to be applied, as well as the level of scrutiny required to address identified risks. AIs should also maintain clear and proper communication with customers, including explaining that such services are intended to meet basic banking needs and are provided in a manner commensurate with the assessed risks. AIs are reminded to refrain from adopting a “one-size-fits-all” approach to the treatment of banking services. AIs (particularly those providing retail banking services to individual customers) should review and, where necessary, revise their policies and procedures in respect of banking services for higher-risk individuals, and take into account the guidance in the Annex in the design and implementation of the relevant measures.

This circular has been jointly developed by the Banking Conduct Department and the Enforcement & AML Department of the HKMA. Should your institution have any questions regarding this circular, please send them to financial_inclusion@hkma.iclnet.hk or approach your usual supervisory contact in the HKMA’s AML and Financial Crime Risk Division. Yours faithfully, Arthur Yuen Deputy Chief Executive Encl. cc: The Chairperson, The Hong Kong Association of Banks The Chairperson, The DTC Association Secretary for Financial Services and the Treasury (Attn: Mr Timothy Wong)

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Annex
Banking Services for Individuals with Higher Risk Profiles To assist Authorized Institutions (AIs) in effectively managing and mitigating risks associated with individuals assessed as presenting higher risks (“higher-risk individuals”), and in adopting relevant measures in line with a risk-based approach, the following guidance is provided on the provision of banking services for higher-risk individuals. For the avoidance of doubt, AIs are required to continue to comply with the relevant legislation and regulations, including but not limited to those relating to anti-money laundering and counter-financing of terrorism (AML/CFT). The relevant measures and examples set out in the ensuing paragraphs are not exhaustive. (A) Access to Basic Banking Services The Hong Kong Monetary Authority (HKMA) expects AIs to adopt a risk-based approach in their AML/CFT efforts, ensuring effective risk management that aligns with the principles of treating customers fairly and financial inclusion. When an individual is assessed as presenting a higher risk, AIs are required to apply appropriate risk-mitigating measures as part of their AML/CFT efforts. If AIs determine that a broader range of banking services is not appropriate for the individual due to the level of risk exposure, they are expected to make reasonable efforts to facilitate customers’ access to basic banking services, thereby supporting their day-to-day banking needs and livelihood. Specifically, AIs should consider offering banking services to higher-risk individuals residing in Hong Kong who have genuine banking needs on a case-by-case basis, subject to appropriate safeguards and limitations. The range of such basic banking services should include deposits, withdrawals, payments, and fund transfers, taking into account the individual’s specific circumstances. AIs should also consider offering other basic banking services that are deemed appropriate and necessary for the customer’s basic livelihood needs.

(B) Application of safeguards and limitations As part of their risk mitigation efforts, AIs should consider applying reasonable safeguards and limitations on banking services offered to customers identified as higher-risk. These may include confining incoming funds to acceptable sources, such as wages and salaries received in the course of employment, government disbursements, and insurance payouts, or prohibiting incoming funds from specified sources. AIs may also determine the permissible payment channels and scope of account usage, such as domestic transactions only, payments to pre￾registered payees, or transactions for ordinary expenses necessary for livelihood needs (e.g. rent, utility bills, loan repayments, and tuition fees). AIs may also implement other measures such as imposing transaction limits for payments, transfers, remittances, or establishing account balance thresholds. AIs may adapt their implementation approach, which should be proportionate and subject to regular review to ensure that they remain appropriate and effective in line with their risk assessments. As a matter of principle, AIs should prioritise managing risks through the application of risk mitigation measures where possible, before deciding to end a banking relationship with a customer. Customers with existing accounts should not be requested to open a new bank account at another AI solely because they have been identified as higher-risk. (C) Pathways for review and transition As a customer’s risk profile may evolve over time, AIs should establish a review mechanism and accede to customers’ requests for a review and update of their risk profile, for example, where new or supplementary information corroborating a change in circumstances becomes available (such as acquittal of earlier charges). AIs should also put in place policies and procedures to review whether customers initially provided with basic banking services subject to safeguards and limitations are eligible for a transition to a broader range of banking services, where appropriate. Where a review indicates a reduced risk profile, AIs should consider upgrading the banking services provided to the customer, subject to any necessary additional customer due diligence (CDD) measures commensurate with the level of risk.

(D) Customer Communication
When offering banking services subject to risk-mitigating measures to prospective and existing customers, AIs should clearly communicate the range of services and the terms and conditions governing them, including but not limited to any specific safeguards and limitations, customers’ obligations in using the services, and the consequences of any breaches. AIs should also explain to customers that such services are intended to meet basic banking needs and will be provided in a manner commensurate with the assessed risks. Customers should also be informed of the arrangements and any other information necessary to facilitate subsequent review and transition to a broader range of banking services. In cases where an individual is assessed as posing heightened risks which cannot be adequately mitigated (such as repeated misuse of bank accounts), and an account is not provided, AIs should inform applicants of the result as soon as practicable, along with the reason(s) for the decision, unless an exceptional circumstance applies, for example, where such disclosure be unlawful. AIs should also ensure that adequate training is provided to frontline staff involved in customer onboarding and review to facilitate proper communication with customers.