While the Banking Conduct Department formulates, and monitors banks' compliance with standards and requirements, non-compliant practices or behaviour manifest themselves through complaints from customers or other sources. Of course, the HKMA must investigate these cases in an impartial and professional manner and derive findings based on facts and evidence. Although the complainant or the bank concerned may not always be agreeable to the outcome of the HKMA's investigations, we must understand that disputes between banks and customers are generally civil or commercial in nature (provided no criminal element is involved). Apart from seeking help from the HKMA, the complainant may also approach the Consumer Council, or seek to resolve the case through mediation, arbitration or the courts, if he is not happy with the findings of the HKMA.
Rights and Obligations of the Consumers
I need to emphasise here that the concept of rights and obligations apply equally to banks and their customers. While banks are endowed with the trust of their customers, they must adopt a customer-centric approach with due regard to customers' needs and interests. On the other hand, while bank customers enjoy the convenience of "financial supermarkets", they must also ensure that they make adequate effort to understand the risks, costs and suitability of the myriad banking products and services available. They cannot simply put the blame on the banks whenever they suffer an investment loss or get into financial difficulty after excessive borrowing. As such, the Banking Conduct Department and the Enforcement Department have been actively engaging the banking industry in promoting the Treat Customers Fairly Charter. We have also launched a series of financial education programmes during the past two years, highlighting the need for smart and responsible consumer behaviour when using banking services.
In conclusion, the HKMA's two-pronged approach to banking supervision allows us to monitor the robustness of banks at the balance-sheet level and the integrity of banks' business conduct — two distinct tasks requiring different skills and experience. That was the reason behind the establishment of the Banking Conduct Department and the Enforcement Department. This is an important reform of the HKMA's organisational structure and helps to strengthen our regulatory oversight of the banking industry. It also sends a clear and important message to banks: apart from ensuring the robustness and safety of their balance sheets, the ethical business practices and professional integrity of their employees are equally important.
We believe this approach suitably addresses the need for increased protection for consumers and investors alike under the universal banking model. Hong Kong banks have grown into a very big and competitive industry and have been the major providers of wealth management services. Our financial platform serves both local customers and a rapidly rising number of international customers in Asia and Mainland China, and copes with a huge volume of financial transactions conducted with hundreds of thousands of customers each day. Therefore, Hong Kong banks and their employees must, in accordance with the HKMA's supervisory requirements, conduct business in a professional, customer-centric manner. Only then can we strive to attain sustainable development and consolidate our position as the premier financial hub of Asia.
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