Hong Kong FSTB Issues New AI Policies for Financial Sector

The Hong Kong Financial Services and Treasury Bureau (FSTB) released a policy framework today focusing on responsible AI use within the financial services industry.

The bureau, responsible for developing and enforcing financial policies, emphasized that AI deployment should enhance efficiency, security, and customer service standards across the sector. The FSTB also recommended a “dual-track approach” to foster innovation in AI while addressing potential challenges.

According to the policy statement, Hong Kong’s financial services industry, which includes banking, securities, insurance, accounting, pension fund management, and green finance, is well-positioned to incorporate AI into operations.

The FSTB plans to partner with financial regulators and service providers to ensure that the adoption of AI technology remains secure and effective. The bureau described this as “a balancing act” that aims to “capture opportunities and mitigate risks” associated with the new technology.

Six Key AI Applications for Financial Services

The FSTB identified six primary areas where AI applications could benefit the financial industry: research and data analysis, investment strategy development, customer service improvements, automated risk assessments, crime detection and prevention, and workflow automation.

These areas reflect a targeted approach to leveraging AI to address specific industry needs, from streamlining operations to enhancing customer interaction.

As AI adoption progresses, the FSTB emphasized establishing a supervisory framework to protect stakeholders and mitigate potential disruptions, such as job displacement and concerns over intellectual property rights.

The bureau’s approach ensures that AI technologies are adopted with comprehensive safeguards for all participants within Hong Kong’s financial ecosystem.

Upcoming SFC Guidance on AI Regulations

In addition to the FSTB’s policy announcement, the Hong Kong Securities and Futures Commission (SFC) is set to provide further regulatory guidance on AI. A circular scheduled for November is expected to outline specific compliance obligations and associated risks, offering financial institutions more detailed requirements for integrating AI technology.

Moreover, the SFC recently collaborated with the Customs and Excise Department (C&ED) to strengthen oversight of cryptocurrency over-the-counter (OTC) trading, a service that allows 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 FSTB and SFC’s collaborative regulatory efforts signal a structured approach to adopting AI across financial services, with a clear focus on balancing innovation with protective measures for stakeholders.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

Post Views: 10