Hong Kong aims to stay ahead in fintech by issuing AI guidelines, seeking both innovation and stability.
Hong Kong is setting the stage for new policies that will regulate the use of artificial intelligence (AI) in the finance sector, according to Bloomberg report on September 17, 2024. With the world increasingly recognizing AI’s role in reshaping industries, Hong Kong aims to maintain its status as a financial hub while managing the ethical implications of AI technology.
The Financial Services and Treasury Bureau is preparing to issue its first AI framework, focusing on ethical guidelines and principles for AI in finance. These rules will target applications ranging from trading systems to investment banking and cryptocurrencies.
AI Regulations to Address US-China Tech Tensions
Hong Kong faces challenges as it remains caught in the tech battle between the US and China. Major AI tools like ChatGPT and Google’s Gemini are still unavailable due to concerns from US companies about Hong Kong’s regulatory landscape. Chinese alternatives, such as Baidu and ByteDance, also struggle due to similar limitations.
Despite this, officials remain hopeful. They plan to release a policy statement during Hong Kong’s Fintech Week in late October 2024, outlining guidelines for responsible AI use in finance. The government expects this to attract more investment, positioning Hong Kong as a key player in financial AI.
The upcoming statement will likely merge existing regulations, including rules on cloud storage and virtual data centers. Recently, Hong Kong’s Securities and Futures Commission (SFC) updated its rules to cover AI tools. That allows financial firms to test Gen AI applications within a regulatory sandbox.
Although uncertainties remain, the policy will guide rather than impose. The government is expected to support AI, signaling that detailed regulations will come later.
Hong Kong Balances AI Innovation Pressures
Hong Kong aims to stay ahead in fintech by issuing AI guidelines, seeking both innovation and stability. Meanwhile, Singapore has already taken the lead in creating clear policies for AI, cryptocurrency, and fintech, putting pressure on Hong Kong to act swiftly. Now, Hong Kong must carefully manage the need to innovate while addressing political and ethical concerns.
The policy set for release in October will shape how AI fits into Hong Kong’s financial system. Although immediate regulations may not follow, the statement will guide the sector, ensuring Hong Kong’s position as a forward-looking financial center amid global tech challenges.
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