The Hong Kong government is preparing to take a stance on artificial intelligence in the financial sector, launching concrete applications of AI in relevant areas including trading, investment banking and cryptocurrency. Officials are expected to make a statement in late October, during Fintech Week.
Hong Kong’s Financial Services Bureau and Treasury is set to provide guidelines for the ethical use of AI and its general application in the financial sector, with the documents currently being drafted and likely to be adjusted based on industry feedback – an indicator of Hong Kong’s support for AI.
Hong Kong, in the midst of a tech melee between the US and China, sees its local lawmakers trying to clarify the uncertainty around AI, while many businesses and consumers still find ChatGPT or Gemini inaccessible at times, as US technocrats fear conflicts will arise on Chinese territory – highlighted by the unavailability of US services such as OpenAI, Anthropic or Google, while China’s Baidu and ByteDance are on the verge of being unusable.
Beijing’s growing influence only increases foreign investors’ concerns. Singapore and the rest of Southeast Asia, at the forefront of fintech and artificial intelligence development, have become a prime option.
As Hong Kong seeks to become a financial hub, a spokesperson for the Financial Services Bureau and the Treasury said the government is “closely monitoring market developments and global experiences to promote the responsible use of AI in the financial sector.”
Last year, the Securities and Futures Commission revised its regulations regarding the use of external data storage providers to include public and private cloud services, as well as virtual and physical data centers.
In August, the Hong Kong Monetary Authority, in collaboration with Cyberport, a government-backed tech hub, set up a regulatory sandbox for banks to test the next generation of AI, though whether it will be allowed to be used in the real world is still unclear. Upcoming AI guidelines are expected to provide centralized rules.
Meanwhile, Wall Street is speculating about how AI could affect the operations of financial firms — banks are hiring AI professionals globally, using related technologies to accomplish tasks such as reviewing portfolios or identifying potential defaults.
The Hong Kong authority’s commitment statement suggests that regulators will favour the application of AI and prescribe more enforceable rules later, given that the announced statement on such a policy would only provide general guidance that is not yet statutory.
In addition, the statement also seeks a detailed consolidation of many instructions from each banking and securities regulator, being independent of the Hong Kong Innovation, Technology and Industry Bureau, which will focus on the development of AI tools.