(Bloomberg) — Hong Kong’s government is preparing to issue its first policy statement on the use of artificial intelligence in finance, people familiar with the matter said, a move that could boost the use of the technology in areas ranging from trading to investment banking to cryptocurrencies.
Most read articles on Bloomberg
The city’s Department of Financial Services and Treasury plans to release a framework of guidelines covering the ethical use of AI and general principles for applying the technology in the finance industry, said the people, who asked not to be identified discussing the matter because of their privacy. Officials are still drafting the document while getting feedback from the industry, the people said. Details could change in the coming weeks.
Details are scarce, but the document is broadly intended to be Hong Kong’s support for AI as governments around the world grapple with the technology’s potential. Embroiled in the U.S.-China technology dispute, local regulators are also trying to clear up some of the confusion over AI in Hong Kong. Analysts say many consumers and businesses don’t have easy access to the hottest services, from OpenAI’s ChatGPT to Google’s Gemini, likely because U.S. tech leaders fear running afoul of Hong Kong’s rules.
The regulator is expected to issue a statement around the end of October during Fintech Week, one of the industry’s most important annual gatherings.
“The government and financial regulators are closely monitoring market developments and global experience to promote the responsible use of AI in the financial industry,” a Financial Services and Treasury Department spokesperson said in a statement. “The government will publish a policy statement later this year setting out its policy position and approach on the application of AI in financial markets.”
Hong Kong wants to reposition the wealthy city as a financial center as foreign investors, wary of Beijing’s tightening control, consider alternatives such as Singapore. The Southeast Asian country has taken the lead in drawing up guidelines on everything from cryptocurrencies to fintech and AI.
At the same time, Wall Street is exploring how AI might change the way financial institutions do business: Banks around the world are advertising for AI talent, using the emerging technology to perform tasks like examining customer portfolios and identifying those at risk of defaulting on their loans.
The story continues
Policy statements are broad directions and cannot be implemented immediately, but they have become a common way for the Hong Kong government to signal its commitment to new and competitive policy areas such as Web3 and family offices. The expected statement suggests regulators will adopt a favorable stance on AI applications and will issue more specific rules at a later date, according to people familiar with the matter.
The policy statement also aims to consolidate various detailed guidelines from individual banking and securities regulators, the people said. It will be a separate effort from the government’s technology office, which is focusing on developing indigenous AI tools, they added.
Some Hong Kong financial professionals have recently grown nervous about the difficulty of entering such services and regulatory uncertainty about their use by businesses, according to people familiar with the matter.
This global financial capital is an AI no-man’s land: Tech Daily
U.S. companies such as OpenAI, Anthropic and Alphabet Inc.’s Google won’t be able to use their chatbots here, while chatbots from Chinese tech giants such as Baidu Inc. and ByteDance Ltd. may be difficult to use or not usable at all.
But there are workarounds: Microsoft, the major US provider, has made its tools available in cities, and other means such as a VPN (Virtual Private Network) can allow users to spoof their location to access the chatbot.
The New York City Securities and Futures Commission last year updated its guidelines on the use of external data storage providers to cover public and private cloud services, and virtual and traditional data centers.
The Hong Kong Monetary Authority and government-backed technology hub Cyberport launched a regulatory sandbox in August for banks to try out a new generation of AI use cases. It’s unclear when regulations will allow these applications to be used in the real world. The new AI guidelines are expected to provide uniform rules and clarity on such use.
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
