Local finance firms lead in AI but regulations hinder growth

58% of financial firms in the city will utilise AI next year.

Hong Kong is way ahead of Singapore, the United Kingdom and the United States in terms of financial institutions deploying AI, but barriers to innovation persist, a Finastra survey revealed.

More than half (58%) of financial firms in the city are keen on utilising AI next year, at least 11% higher than any other market surveyed. Furthermore, nine out of 10 (95%) of firms view fintech partnerships as a factor to their success, with 89% of respondents either having adopted, currently adopting, or mulling to adopt open APIs in the next 12 months.

Half (53%) of Hong Kong respondents said that open banking has allowed them to deliver new services and new revenue streams, compared to 26% in Singapore and a measly 16% in the UK. Two-thirds (67%) revealed that better customer service is a factor that would promote collaborations.

However, six out of 10 (62%) said that Hong Kong’s regulations hinder further growth as they feel that there is not enough government or industry support. Cost of development (55%) is another particular concern. This factor is also a matter of concern for Singapore (51%).

In terms of collaborations, complex regulations are once again the leading barrier (50%), followed by legacy systems (47%), lack of internal understanding or skills (45%), internal culture (40%) and a reduced control in decision-making (32%).

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