SUMMARY

• Hong Kong plans to issue AI policies for the finance sector by the end of October.
• The new guidelines aim to enhance AI use in trading, investment banking, and cryptocurrency markets.

Hong Kong is planning to issue new policies on artificial intelligence (AI) for the finance sector by the end of October, intending to upgrade AI utilization in trading, investment banking, and cryptocurrency markets. The Financial Services and the Treasury Bureau (FSTB) is initiating this activity, centering on establishing a system for the ethical application of AI. The rules are anticipated to be finalized and revealed during the Hong Kong FinTech Week, which will be held from October 28 to November 1.

The development of these AI policies reflects Hong Kong’s vital approach to integrating advanced technology into its financial scene. By leveraging AI, the Hong Kong government aims to modernize traditional financial practices and boost effectiveness in different sectors, including trading, investment banking, and digital currencies. The FSTB is now drafting the policy document and requesting feedback from industry stakeholders to guarantee that the regulations effectively address real-world needs and challenges.

In addition to this, Hong Kong is closely monitoring worldwide AI adoption patterns to educate its policy-making. This effort comes amid the progressing US-China tech strife, which has limited the use of prominent AI tools like OpenAI’s ChatGPT and Google’s Gemini in the region. As a result, Hong Kong has focused on cultivating grassroots-level AI development and adoption. This key move aims to outwit the limitations imposed by the tech conflict whereas advancing local technological capabilities.

Parallel to the upcoming finance sector AI guidelines, the Hong Kong Monetary Authority (HKMA) has as of now issued standards for the use of generative AI in consumer-facing applications. These rules emphasize the significance of governance, straightforwardness, and data security. They address the developing use of generative AI tools in areas such as customer chatbots, personalized product and service delivery, focused on marketing, and robo-advisors for wealth management and insurance.

Alan Au, the executive director of the HKMA’s banking conduct division, highlighted the rise in generative AI applications and underscored the need for strict oversight. The HKMA has mandated that board members and senior administration be held responsible for decisions related to generative AI, especially those influencing consumer intuitive. Also, authorized institutions are required to guarantee vigorous measures for safeguarding client data.

Hong Kong’s comprehensive approach to AI regulation reflects its desire to harness technological advancements whereas developing a high standard of moral hones. By setting these rules, the city aims to position itself as a leader in the mindful use of AI in finance, leveraging innovation with regulatory oversight.