New rules meant to protect HSBC amid tensions, academics say

Winnie Lee

The updates HSBC has made to its online and mobile banking terms constitute a move to protect itself from legal and compliance issues when international banks are facing a fraught political environment, academics believe.

Citing as example the US sanctions on Hong Kong, any bank which has operations in the country has to act according to the restrictions, explained Billy Mak Sui-choi, an associate professor at Baptist University's department of finance and decision sciences.

A bank may not be able to provide services to sanctioned persons when they are in the United States as "it has to obey the law there."

HSBC's move is just a form of disclaimer, which is usually vague to protect the lender from legal or compliance issues, Mak said, adding there are many other banking options for worried Hongkongers.

HSBC's update, made on Monday, stoked fears that Hong Kong customers would not be allowed to access the lender's online and mobile banking services when they are overseas.

But HSBC said later that night that Hong Kong customers will continue to have access.

It issued a clarification following the "misunderstanding" that arose after a notice combined the "Terms and conditions for HSBC internet banking" and "Terms and conditions for HSBC HK mobile banking app and mobile security key" into one document.

If customers use or download online or mobile banking outside of Hong Kong, the bank may not be allowed to provide related products or services in the country or region where the customer is located or resides, the notice said.

Due to different regulations outside Hong Kong, customers may not be able to activate some functions when using the application overseas, it added.

There are similar cross-border disclosures in other markets, an HSBC spokesperson said.

Financial services lawmaker Ronick Chan Chun-ying said he thinks the HSBC move has nothing to do with the national security law.

Other large banks in Hong Kong also have the same terms, Chan said, and these were already in place before the legislation of the national security law. People just did not pay attention to the terms in the past, he noted.

In addition, Chan said some Western countries require residents to declare all their overseas bank accounts and investments due to tax considerations. So, Chan said, Hong Kong people who have immigrated to those Western countries and have not done so while continuing to use online services could be violating the regulations.

Banks in Hong Kong must spell out the terms clearly so as not to be questioned, he added.

Chan believes that even if Hong Kong residents move overseas, they can continue to operate their bank accounts as long as they make declarations in accordance with the requirements of the relevant countries.

winnie.lee@singtaonewscorp.com