The Hong Kong government is set to release its first comprehensive policy on the use of artificial intelligence (AI) in the finance sector by the end of October 2024.
The move is expected to drive the adoption of AI in key areas such as traditional trading, investment banking, and cryptocurrency markets, aligning Hong Kong with global efforts to harness AI’s potential in financial services.
According to reports, the Financial Services and Treasury Bureau (FSTB), a government agency responsible for financial and treasury policies, is currently drafting the framework.
The guidelines will focus on the ethical use of AI within the finance industry. To ensure a robust policy, the bureau is incorporating feedback from industry stakeholders while also reviewing global AI practices.
A New Era for AI in Hong Kong’s Financial Sector
Hong Kong authorities aim to finalize and unveil the policy at the upcoming Hong Kong FinTech Week, scheduled from October 28 to November 1, 2024. The guidelines will mark a significant step towards integrating AI into the finance sector, offering clarity on how the technology can be used to enhance operational efficiency and customer services.
A spokesperson from the FSTB highlighted the importance of responsible AI usage, stating, “As artificial intelligence technology continues to evolve, the government and financial regulators are closely monitoring market developments and global experiences to promote the responsible use of AI in the financial industry.”
Addressing Ethical and Practical Concerns
The AI framework will address key concerns related to AI’s role in handling large datasets, making predictions, and automating decisions within the financial markets.
It will emphasize ethical guidelines, focusing on transparency, data protection, and the need for human oversight in AI-driven processes.
In August 2024, the Hong Kong Monetary Authority (HKMA) issued principles for using generative AI in consumer-facing applications, underscoring the need for governance and accountability. The new framework is expected to build on these principles, offering broader guidance for financial institutions adopting AI.
AI and Web3 Integration
AI’s potential is not limited to traditional finance. The technology is also playing a significant role in Web3 developments, particularly in enhancing smart contracts with advanced automation and decision-making capabilities. These innovations could transform how contracts adapt to new data or changing conditions, reducing the need for human intervention while boosting efficiency.
Strategic Impact on Finance
The AI policy is expected to encourage the financial sector to adopt AI for strategic purposes, such as improving customer service through predictive analytics, refining investment strategies with machine learning, and optimizing trading operations. As AI integration becomes more widespread, financial institutions will likely need to adjust their operations, employee training, and decision-making processes.
While the specifics of the policy remain unclear, Hong Kong’s commitment to embracing AI is evident. The upcoming framework will position the city as a forward-thinking hub for AI in finance, with potential benefits not only for local markets but also for global financial systems.
