The Hong Kong government is set to release its first policy statement on the use of artificial intelligence (AI) in finance, according to sources familiar with the matter. This move is expected to accelerate the adoption of AI technology across various financial sectors, including trading, investment banking, and cryptocurrencies.
The Financial Services and Treasury Bureau is currently drafting a framework of guidelines that will address the ethical use of AI and establish general principles for its application in the financial world. While the document is still in development and subject to change, officials are actively seeking feedback from industry stakeholders.
This initiative comes at a crucial time as governments worldwide grapple with the potential of AI technology. Hong Kong’s effort to provide clarity on AI usage is particularly significant given the city’s unique position in the US-Chinese technology conflict. Many global tech leaders, including OpenAI and Google, have been hesitant to make their popular AI services readily available in Hong Kong, likely due to concerns about navigating the territory’s regulatory landscape.
The policy statement is expected to be unveiled during Fintech Week in late October, one of the industry’s most important annual events. A spokesperson for the Financial Services and Treasury Bureau confirmed that the government and financial regulators are closely monitoring market developments and global experiences to promote responsible AI use in the financial industry.
This move is part of a broader strategy to reinforce Hong Kong’s position as a leading financial center. As foreign investors express growing concerns about Beijing’s increasing influence, some are considering alternative locations such as Singapore. The Southeast Asian nation has already made significant progress in developing guidance for emerging technologies, including cryptocurrencies, fintech, and AI.
The financial sector globally is exploring ways to leverage AI to transform operations. Major banks are actively recruiting AI talent and implementing emerging technologies for tasks such as analyzing client portfolios and identifying potential defaulters.
While the upcoming policy statement will provide broad direction rather than immediately enforceable rules, it signals the Hong Kong administration’s commitment to embracing new and competitive policy areas. Similar statements have been issued in the past for initiatives like Web3 and family offices.
The anticipated guidelines are expected to adopt a favorable stance toward AI applications, paving the way for more concrete regulations in the future. The policy statement aims to consolidate various detailed guidance from individual banking and securities regulators, providing a unified approach to AI in finance.
This initiative is separate from the efforts of the government’s technology bureau, which is focused on developing its own AI tools. The finance-specific guidelines are intended to address growing concerns among Hong Kong’s financial professionals about the difficulties in accessing certain AI services and the regulatory uncertainties surrounding their use by companies.
Currently, major US-based AI providers like OpenAI, Anthropic, and Google do not offer their chatbots in Hong Kong. Similarly, AI tools from Chinese tech giants such as Baidu and ByteDance can be challenging or impossible to use within the territory. However, some workarounds exist, such as Microsoft’s accessible tools and the use of virtual private networks (VPNs) to disguise user locations.
The Hong Kong Monetary Authority and the government-backed technology hub Cyberport launched a regulatory sandbox in August, allowing banks to experiment with new generative AI use cases. The upcoming AI guidelines are expected to provide unified rules and clarity on how these applications can be implemented in real-world scenarios.
In preparation for the growing role of AI in finance, the Securities and Futures Commission updated its guidelines on using external data storage providers last year to include public and private cloud services, as well as virtual and conventional data centers.
As Hong Kong positions itself at the forefront of AI adoption in finance, this policy statement represents a significant step toward creating a supportive and clear regulatory environment. By addressing ethical concerns and providing general principles for AI application, Hong Kong aims to strike a balance between fostering innovation and ensuring responsible use of this transformative technology.
The success of this initiative could have far-reaching implications for Hong Kong’s financial sector, potentially attracting more international firms and talent to the city. As the global race to harness AI’s potential in finance intensifies, Hong Kong’s proactive approach may help solidify its position as a key player in the evolving landscape of financial technology.
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