On 19 Dec 2024, the HKMA mandated retail banks (including digital banks) to engage multiple Credit Reference Agencies under Credit Data Smart to ensure operational resilience, requiring 24-hour migration capability during CRA disruptions and full implementation by Q3 2025. This requirement replaces the prior single-CRA dependency under SPM IC-6, with annual migration drills and testing mandated to maintain uninterrupted credit risk management.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SPOTLIGHT ON
FAMILY OFFICES
Operational Resilience Requirement for Credit Reference Agencies
On 19 Dec 2024, the Hong Kong Monetary Authority (HKMA) has issued a circular requiring retail banks (including digital banks) to engage more than one Credit Reference Agency (CRA) under Credit Data Smart (CDS) to strengthen operational resilience and ensure continuity of credit business operations, replacing the previous single-CRA dependency as set out in Supervisory Policy Manual (SPM) module IC-6.
Scope and Implementation Requirements
The operational resilience requirement mandates that banks cover all consumer credit referencing services relevant for credit risk management under SPM IC-6, including credit reports and data correction facilitation. Banks must implement policies enabling swift migration to an alternative CRA within 24 hours of service disruption, ensuring no degradation in customer service or risk management capabilities, and conduct annual migration drills to validate data reliability and operational readiness.
Implementation Timeline and Compliance
Banks must enter into agreements with multiple CRAs by January 2025, complete necessary testing by Q2 2025, and fully implement the requirement no later than Q3 2025. The HKMA will consider case-by-case requests for extended timelines with strong justifications. While primarily applicable to retail banks, all Authorized Institutions acting as credit providers under CDS are encouraged to adopt the requirement based on their operational needs.
View the full article:Source
