HONG KONG: Regulators need to do more to allow new technologies that could help in the fight against money laundering, as financial institutions are struggling with ever-growing compliance costs, an Asia finance industry group said on Thursday.
Banks have been slapped with vast sums for not preventing money being laundered through their accounts, and the call for action comes after Commonwealth Bank of Australia last week was fined a record $530 million for breaching money laundering and terror financing laws.
The Asia Securities Industry and Financial Markets Association said it would like to see greater use of new technologies in “know your client” or KYC anti-money laundering checks, as they promise to drastically cut costs.
“Fintech solutions, facial recognition for example, hold out great hope for the industry, but haven’t been embraced as quickly as some might like by regulators around the world,” said Mark Austen, chief executive of the association.
The Hong Kong Monetary Authority and the Monetary Authority of Singapore said last year they were exploring whether KYC utilities, central repositories of data that banks can tap to save duplication when adding new clients, should be set up.
But the process is taking time amid concerns about who would have liability when data was wrong.
Grappling with compliance and the costs involved has become an onerous task for most banks and brokerages. In 2017, the number of employees working on KYC compliance in financial institutions reached an average of 307, jumping from just 68 a year earlier, the association said in its report.
HSBC alone spent $3 billion last year on compliance. It tripled its compliance headcount between 2013 and 2017 and now employs 8,600 compliance staff.
“Whether KYC and AML (anti-money laundering) headcount will fall comes down to whether the institutions can automate — there are a lot trying to as it means they can cut costs and probably actually improve compliance,” Austen added.
The association called on its members to help regulators understand developments and harmonize standards as different KYC rules across the region raised costs for cross-border financial groups, who were also interpreting those rules in different ways.
“It would be good if financial institutions in Asia at least all thought about the issues around KYC in a similar way,” said Will Haslet, partner at law firm Herbert Smith Freehills, which contributed to the report.
“When we talk about the longer term solution of technology, consistency is necessary.”
Asia banks urge watchdogs to approve more fintech as compliance costs grow
Asia banks urge watchdogs to approve more fintech as compliance costs grow
Kuwait to boost Islamic finance with sukuk regulation
- The move supports sustainable financing and is part of Kuwait’s efforts to diversify its oil-dependent economy
RIYADH: Kuwait is planning to introduce legislation to regulate the issuance of sukuk, or Islamic bonds, both domestically and internationally, as part of efforts to support more sustainable financing for the oil-rich Gulf nation, Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah said on Wednesday.
Speaking at the World Governments Summit in Dubai, Al-Sabah highlighted that Kuwait is exploring a variety of debt instruments to diversify its economy. The country has been implementing fiscal reforms aimed at stimulating growth and controlling its budget deficit amid persistently low oil prices. Hydrocarbons continue to dominate Kuwait’s revenue stream, accounting for nearly 90 percent of government income in 2024.
The Gulf Cooperation Council’s debt capital market is projected to exceed $1.25 trillion by 2026, driven by project funding and government initiatives, representing a 13.6 percent expansion, according to Fitch Ratings.
The region is expected to remain one of the largest sources of US dollar-denominated debt and sukuk issuance among emerging markets. Fitch also noted that cross-sector economic diversification, refinancing needs, and deficit funding are key factors behind this growth.
“We are about to approve the first legislation regulating issuance of government sukuk locally and internationally, in accordance with Islamic laws,” Al-Sabah said.
“This enables us to deal with financial challenges flexibly and responsibly, and to plan for medium and long-term finances.”
Kuwait returned to global debt markets last year with strong results, raising $11.25 billion through a three-part bond sale — the country’s first US dollar issuance since 2017 — drawing substantial investor demand. In March, a new public debt law raised the borrowing ceiling to 30 billion dinars ($98 billion) from 10 billion dinars, enabling longer-term borrowing.
The Gulf’s debt capital markets, which totaled $1.1 trillion at the end of the third quarter of 2025, have evolved from primarily sovereign funding tools into increasingly sophisticated instruments serving governments, banks, and corporates alike. As diversification efforts accelerate and refinancing cycles intensify, regional issuers have become regular participants in global debt markets, reinforcing the GCC’s role in emerging-market capital flows.
In 2025, GCC countries accounted for 35 percent of all emerging-market US dollar debt issuance, excluding China, with growth in US dollar sukuk issuance notably outpacing conventional bonds. The region’s total outstanding debt capital markets grew more than 14 percent year on year, reaching $1.1 trillion.
