Nearly 40% of Financial Institutions in Hong Kong Utilize AI Operations, Surpassing Singapore. Specialists in Related Fields Difficult to Recruit

According to a report by Grant Thornton Hong Kong, the Hong Kong financial industry leads other regions in the application of artificial intelligence (AI), with 38% of financial institutions in Hong Kong incorporating generative AI into their daily operations, exceeding Singapore's 16% and the global average of 26%. However, the report also reveals that 49% of the interviewed Hong Kong companies find it difficult to recruit AI specialists. Consultancy Director Winnie Wong believes that authorities should enhance talent development and initiate global cooperation to address the talent shortfall.

This Grant Thornton report titled "The Fintech Revolution: AI Applications and Innovations in Financial Services" indicates that generative AI is driving the transformation of Hong Kong's financial industry. The report shows that the Hong Kong banking sector is significantly increasing its investment in fintech, with investment amounts expected to rise by 40% from 2022 to 2025 compared to the period from 2018 to 2021. Simultaneously, the industry plans to increase fintech talent by 40% by 2025.

The report also notes that last year, Banking as a Service (BaaS) and embedded finance were focal points for financial services institutions' investments. BaaS deployment surged to 51% last year, up from 33% in 2022. During the same period, embedded financial services also rose from 27% to 43%. Additionally, 35% of Hong Kong financial institutions plan to use generative AI for ESG data analysis and decision-making.

The quality of AI data and algorithmic bias remain concerns. Grant Thornton's Deputy Consultancy Director Jennifer Yan suggests that enterprises refer to the high-level principles for AI application introduced by the Hong Kong Monetary Authority in 2019, including establishing complete governance, monitoring, and accountability frameworks when financial institutions use AI and ensuring customer privacy protection. This, she believes, will help enterprises use AI in a compliant and effective manner.

As for the potential future applications of AI in the financial sector, Senior Consultant Anthony Ong believes that AI could be used for automated trading, smart contracts, and decentralized finance, assisting companies in reducing costs and improving efficiency. Furthermore, AI could also be deployed in areas such as educating clients on investment strategies and anti-money laundering.

The Hong Kong government has heavily invested in AI in recent years, including the establishment of a supercomputing center. Grant Thornton's Partner Kenneth Ha believes these initiatives will aid the development and application of AI technology in Hong Kong. Regarding whether the recently announced AI Declaration by the government will affect the willingness to apply AI in the financial sector, Kenneth Ha thinks that enterprises need to conduct sandbox testing before applying AI tools, and if the tools are compliant, they need not worry about regulation.