As the transformative power of artificial intelligence reshapes industries worldwide, Hong Kong is taking a stand: It’s committed to responsible innovation. During the ongoing Hong Kong FinTech Week 2024, the city introduced its first official guidelines for AI application in the financial sector, marking a strategic move to position itself as Asia’s digital finance leader. In a region marked by rapid technological progress and high regulatory standards, Hong Kong’s approach to AI reflects a blend of ambition, prudence and a forward-looking perspective.
Hong Kong’s new AI framework centers on a “dual-track” strategy that fosters innovation while embedding strong ethical safeguards. This approach underscores the city’s intent to use foresight to manage potential risks, while also fostering a competitive edge in a sector where compliance and trust are critical. By providing a stable, structured environment for AI, Hong Kong is positioning itself as a destination for the world’s leading technology and finance players eager to develop advanced solutions in a trusted regulatory environment.
Hong Kong’s role as a bridge between East and West is well-established, and AI offers a fresh pathway for the city to amplify its influence. Its unique position, combining a globally respected regulatory framework with easy access to both the Chinese mainland and international markets, allows Hong Kong to facilitate cross-border technological collaboration. This position enables the city to connect data flows, talent pools and drive innovation through a governance structure that inspires confidence among international investors.
Additionally, Hong Kong is working to address the challenge of limited access to some international AI platforms, like OpenAI’s ChatGPT, which face restrictions in various regions. By fostering the development of homegrown AI models and tools that meet global standards, the city aims to reduce reliance on foreign technology while maintaining vital connections to global markets. This commitment to building local AI capabilities reinforces Hong Kong’s standing as a leading player in Asia’s digital finance landscape, capable of setting its own standards in innovation.
Hong Kong’s responsible AI guidelines reflect its dedication to ethical governance and consumer protection. Financial institutions adopting AI are required to create robust governance structures that uphold transparency, fairness and accountability. By embedding these standards into its AI policy, Hong Kong signals that responsible AI use is essential to its financial future — not just a regulatory formality.
This framework includes partnerships with local academia, especially institutions like the Hong Kong University of Science and Technology, which will provide financial firms access to local AI models, technical expertise and training resources. These collaborations benefit more than the firms, and reinforce Hong Kong’s commitment to a robust, interconnected AI ecosystem customized to its financial market needs. The result is a resource-rich environment where financial institutions can harness AI’s potential while effectively managing associated risks. Drawing on global best practices while tailoring them locally, Hong Kong is setting an example for financial hubs worldwide.
Hong Kong’s regulators are prepared to uphold a secure and transparent environment for AI. This includes a commitment to regular updates in AI guidelines, close collaboration with industry leaders, and vigilance against cybersecurity threats
Hong Kong’s ambitions extend beyond just AI. During the FinTech Week, the government announced additional plans to expand tax incentives for virtual assets, including digital currencies. These proposed changes will extend current tax breaks for family offices and private funds to cover virtual assets, positioning Hong Kong as a forward-thinking financial center that welcomes the digital finance revolution.
In aligning policies to support both AI and digital assets, Hong Kong is building an ecosystem that integrates traditional and modern finance, appealing to both conventional asset managers and digital-first entrepreneurs. This comprehensive approach demonstrates Hong Kong’s commitment to being a financial center that not only keeps pace with global trends but actively shapes them, further solidifying its position in the international financial community.
Hong Kong’s regulators are prepared to uphold a secure and transparent environment for AI. This includes a commitment to regular updates in AI guidelines, close collaboration with industry leaders, and vigilance against cybersecurity threats. Such efforts are intended to secure a safe and trusted digital economy. Public education initiatives, led by the Investor and Financial Education Council, are another key component of this strategy, ensuring that residents understand both the advantages and risks associated with AI in finance. These initiatives help foster an informed public, boosting trust in the evolving financial sector.
Hong Kong’s focus on responsible AI governance highlights a broader philosophy: Innovation and regulation can support each other. By building a regulatory framework that allows for AI’s growth while safeguarding consumer interests, Hong Kong is positioning itself as a model of balanced governance for financial hubs worldwide. This structured yet flexible approach has the potential to inspire confidence among global investors, industry leaders and the general public alike.
Hong Kong’s AI strategy — supported by tax incentives for digital assets and robust partnerships with academia and industry — illustrates its readiness to shape the future of finance in Asia. Financial Secretary Paul Chan Mo-po has emphasized the city’s focus on collaboration, viewing Hong Kong not merely as a financial hub but as a community of stakeholders — including regulators, academic institutions and technology innovators — committed to creating a thriving digital economy.
As AI technology continues to evolve, Hong Kong’s strategy sets a new standard for other financial centers aiming to balance regulatory oversight with the freedom to innovate. By addressing both challenges and opportunities, Hong Kong’s decisive policies are preparing it to lead Asia’s next chapter of technological growth and financial transformation. This forward-looking approach underscores the city’s commitment to shaping not only its future but also the broader financial and technological landscape across Asia and beyond.
The author is chairman of the Asia MarTech Society and sits on the advisory boards of several professional organizations, including two universities.
The views do not necessarily reflect those of China Daily.
