Hong Kong is preparing new policies to regulate the use of artificial intelligence in the financial sector. According to Bloomberg, the city aims to maintain its position as a financial hub by acknowledging the role of AI in reshaping industries and managing the ethical aspects of AI technology.
AI Regulations in Response to US-China Technology Tensions
Hong Kong faces challenges in the midst of the technological rivalry between the US and China. Major AI tools such as ChatGPT and Google’s Gemini remain unavailable due to concerns from US companies regarding Hong Kong’s regulatory environment. Chinese alternatives like Baidu and ByteDance are similarly affected by comparable restrictions.
Despite these challenges, officials remain hopeful. They plan to release a policy statement containing guidelines for the responsible use of AI in the financial sector during Hong Kong Fintech Week in October 2024. The government expects this move to attract more investment, positioning Hong Kong as a significant player in financial AI.
Balancing Innovation and Pressure with AI
The upcoming statement is likely to integrate existing regulations with rules regarding cloud storage and virtual data centers. Recently, the Hong Kong Securities and Futures Commission (SFC) updated its regulations to include AI tools, allowing financial companies to test generative AI applications within a regulatory sandbox.
Although uncertainties persist, the policy is anticipated to provide guidance. It is believed that the government will support AI while detailed regulations will follow later.
By publishing AI guidelines, Hong Kong aims to maintain its leadership in the fintech arena, balancing innovation and stability. Meanwhile, Singapore has already led by establishing clear policies for AI, cryptocurrency, and fintech, increasing pressure on Hong Kong to carefully manage the need for innovation while addressing political and ethical concerns.
The policy set to be released in October will shape how AI integrates into Hong Kong’s financial system. While immediate regulations may not follow, the statement will guide the sector and reinforce Hong Kong’s position as a forward-looking financial center amidst global technological challenges.
These developments indicate that Hong Kong is adopting a strategic approach to the use of AI in the financial sector. The city’s efforts to promote innovative technologies while upholding ethical principles aim to provide a competitive advantage in the global arena. Steps taken towards integrating AI into the financial sector may significantly influence Hong Kong’s future position and international investments.
