Hong Kong Releases Policy Framework For Responsible AI In Financial Services

According to ShibDaily, the Hong Kong Financial Services and Treasury Bureau (FSTB) has unveiled a policy framework aimed at promoting responsible use of artificial intelligence (AI) within the financial services sector. The bureau, which is tasked with formulating and implementing financial policies, highlighted the importance of AI in enhancing efficiency, security, and customer service standards across the industry. The FSTB proposed a 'dual-track approach' to encourage AI innovation while addressing potential challenges. The policy statement indicates that Hong Kong’s financial services industry, encompassing banking, securities, insurance, accounting, pension fund management, and green finance, is well-equipped to integrate AI into its operations. The FSTB plans to collaborate with financial regulators and service providers to ensure the secure and effective adoption of AI technology. This initiative is described as a 'balancing act' aimed at capturing opportunities and mitigating risks associated with AI. The bureau identified six key areas where AI applications could benefit the financial industry: research and data analysis, investment strategy development, customer service enhancements, automated risk assessments, crime detection and prevention, and workflow automation. These areas represent a focused strategy to leverage AI for addressing specific industry needs, from streamlining operations to improving customer interactions. As AI adoption advances, the FSTB stressed the importance of establishing a supervisory framework to protect stakeholders and mitigate potential disruptions, such as job displacement and intellectual property rights concerns. The bureau’s approach ensures that AI technologies are adopted with comprehensive safeguards for all participants within Hong Kong’s financial ecosystem. In addition to the FSTB’s policy announcement, the Hong Kong Securities and Futures Commission (SFC) is expected to provide further regulatory guidance on AI. A circular scheduled for November will outline specific compliance obligations and associated risks, offering financial institutions more detailed requirements for integrating AI technology. Furthermore, the SFC has recently partnered with the Customs and Excise Department (C&ED) to enhance oversight of cryptocurrency over-the-counter (OTC) trading, a service facilitating private cryptocurrency transactions. This regulatory initiative builds on earlier proposals to introduce a licensing regime for cryptocurrency OTC services, initially planned for the C&ED alone. The collaborative regulatory efforts of the FSTB and SFC indicate a structured approach to AI adoption across financial services, with a clear emphasis on balancing innovation with protective measures for stakeholders.