Hong Kong tells financial firms to adopt “risk-based” approach to AI adoption

The government will adopt a dual-track approach that considers risk.

Hong Kong is encouraging its financial institutions to adopt a “risk-based” approach in implementing and using artificial intelligence (AI) systems.

In a policy statement on the responsible application of AI, the government highlighted that human oversight will be ‘crucial’ to mitigating potential risks.

The government will adopt a dual-track approach to promote the development of AI adoption by the sector, in which security-related issues will be duly considered in the adoption of AI in the financial services industry.

Christopher Hui, secretary for Financial Services & the Treasury, said that financial firms should “seize the opportunities and adopt AI in a responsible manner.”

“There are plenty of AI models and infrastructures available to financial institutions, accounting firms and solution providers. We encourage the financial services industry to make full use of these resources in the market,” Hui said in a statement announcing the launch of Hong Kong’s policy statement on AI adoption.

Financial institutions are asked to formulate an AI governance strategy to provide direction on how AI systems should be implemented and used.

The government said that potential risks posed by AI are “suitably reflected in the relevant regulations/guidelines issued by financial regulators.”

Meanwhile, the Hong Kong University of Science & Technology will reportedly make its self-developed AI model and computing resources available to Hong Kong's financial services industry.

The university is expected to offer advisory and training services for on-premises deployment or Application Programming Interface (API) & Web Interface options.

Separately, the police are exchanging intelligence with international organisations, law enforcement agencies of different jurisdictions and the AI industry to address the challenges on cyber policing posed by AI.

On public education, the Investor & Financial Education Council is tasked with raising public awareness and enhancing the understanding regarding the opportunities and risks presented by AI technology in terms of retail investing and financial management.