On October 28, the Hong Kong Financial Services and Treasury Bureau (FSTB) announced new guidelines designed to enhance the integration of artificial intelligence (AI) within the financial services sector.
During a keynote address at Fintech Week, Christopher Hui, Secretary for Financial Services and the Treasury, emphasized the city’s potential for AI adoption. “Hong Kong’s financial sector has what it takes to promote AI adoption – sizeable markets and rich scenarios,” he stated, highlighting the favorable conditions for innovation.
The FSTB’s announcement outlined a “dual-track approach” to foster AI development while addressing potential challenges associated with its use. The bureau noted that financial institutions in Hong Kong are well-prepared to implement AI solutions, which could enhance research, data analysis, customer interactions, and investment strategies.
In its policy statement, the FSTB identified six significant opportunities for AI applications, including improved risk assessment, crime detection, and workflow automation. Currently, AI is being utilized across various areas in Hong Kong, including banking, insurance, and accounting.
The government plans to work closely with financial regulators and industry stakeholders to facilitate the responsible adoption of AI technologies. Financial Secretary Paul Chan remarked, “As an international financial centre, Hong Kong’s financial market is open and prudent towards the application of AI.” He underscored the importance of keeping pace with technological advancements and leveraging Hong Kong’s unique position in the market.
Hui reiterated the commitment to collaboration among regulators and industry players to create a supportive environment for AI integration. He encouraged financial institutions to take advantage of the AI resources available in the market to enhance their operations.
The government also highlighted three key characteristics of AI in the financial sector: data-driven, dual-natured, and dynamic. As per the official report, financial institutions are encouraged to develop comprehensive AI governance strategies that incorporate risk management and human oversight to mitigate potential risks.
Additionally, the Hong Kong University of Science and Technology plans to offer its proprietary AI model and computing resources to the financial services industry, along with training services for implementation.
Looking ahead, the Securities and Futures Commission (SFC) intends to publish a circular in November outlining the regulations and risks associated with AI use in finance. Earlier this month, the SFC announced its plans to introduce new licensing frameworks for cryptocurrency over-the-counter (OTC) services by the end of 2024.
Earlier this month, reports surfaced that the Hong Kong Securities and Futures Commission (SFC) is preparing to grant additional licenses to crypto businesses by 2024 end. This development comes after the recent approval of HKVAX, marking it as the third licensed crypto exchange in Hong Kong.
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