Hong Kong’s de facto central bank is urging financial institutions in the city to follow a new set of guidelines when using generative artificial intelligence (GenAI) in consumer-facing applications, as adoption grows in the banking sector.
Banks looking to use GenAI in their products should follow a range of principles, including ensuring customers can choose to opt out of using the technology and that AI models do not lead to unfair bias or disadvantage certain consumer groups, the Hong Kong Monetary Authority (HKMA) said in a notice on Monday. Company boards and senior management should also “remain accountable for all the GenAI-driven decisions and processes”, according to the document.
While suggestions laid out in 2019 in a set of principles for banks using AI still largely apply, the HKMA is calling for additional measures to account for potential risks specific to GenAI, which could have an “even more significant impact on customers”, the regulator said.
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How does China’s AI stack up against ChatGPT?
How does China’s AI stack up against ChatGPT?
The guidelines come as regulators see increasing interest in GenAI from the banking sector, the HKMA said. In Hong Kong, 39 per cent of the authorised institutions the bank surveyed have already adopted or are planning to adopt GenAI.
But the banking sector’s use of the technology, popularised by OpenAI’s chatbot ChatGPT, is still at an early stage, the HKMA said. Most firms are using “off-the-shelf” third-party solutions for business functions such as summarisation, translation, coding and internal chatbots, according to the regulator. Use cases could expand potentially to customer-facing chatbots and robo-advisers in wealth management and insurance, it added.
Some finance firms outside the HKMA’s purview already have consumer-facing AI applications. Tiger Brokers, which has a chatbot that offers stock advice, has said its AI is saving investors hours of their time. Hong Kong-based insurance provider FWD Group has signed a four-year deal with Microsoft to use the tech giant’s AI services, which FWD called “very important … for our customers”.
While Hong Kong currently lacks laws or regulations addressing GenAI, the city’s regulators have been trying to keep up with booming adoption of the technology by issuing non-binding guidelines.
The Office of the Privacy Commissioner for Personal Data, the city’s privacy watchdog, in June issued Hong Kong’s first set of personal data protection guidelines for companies using GenAI services. It asked businesses to set up an internal AI governance committee that directly reports to the board and pledged that it would conduct more compliance checks.
The HKMA also launched a GenAI sandbox last week with the government-funded incubator Cyberport, which aims to let financial institutions pilot use cases “within a risk-managed framework” and with technical assistance. Details of the sandbox’s application process have not been disclosed.
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