Hong Kong at par with major financial centres in the race for AI

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HKTDC and PwC release joint survey at AFF 2024: AI and the Future of Financial Services

Hong Kong, 24 January 2024 – Raymund Chao, PwC Asia Pacific and China Chairman, presented the findings of a joint survey with the Hong Kong Trade Development Council (HKTDC) at the Asian Financial Forum (AFF) today. The survey sheds light on Hong Kong’s AI competencies in delivering financial services, as well as the challenges and opportunities organisations face in AI implementation. The survey also considers the regulatory environment and future AI developments in the financial services industry.

Mr Chao said: “It was a great opportunity for PwC, as the exclusive knowledge partner of the Asian Financial Forum, to partner with the HKTDC once again and to release our joint research at the AFF today. The AI era is here, and it is being integrated into businesses around the world at remarkable speed. Encouragingly, our survey found that Hong Kong is perceived to be at par with other finance hubs in the race for AI. The survey highlights the city’s financial services industry as a prime environment for AI adoption. While AI has immense potential for good, it comes with challenges, notably data availability and quality, as well as cybersecurity and data privacy. We believe that a collaborative, responsible, human-led and tech-enabled approach to AI will bring tremendous opportunities for a shared tomorrow.”

Key survey insights 

• Respondents view AI as having made inroads into several areas of financial services in Hong Kong, with virtual assistant/chatbots (80%), fraud detection (70%), and biometric authentication (66%) being the areas where integration is most pronounced. 
• Hong Kong is perceived to be at par with other financial hubs in the race for AI. 41% of respondents believe that the current development and application of AI in the financial services industry is keeping pace with global development.
• The implementation of AI is expected to bring abundant opportunities to organisations. Over 60% of respondents anticipate emerging opportunities in areas such as algorithmic trading (64%), automated customer service (64%), and more effective fraud detection (61%), as well as more efficient claims processing (60%). The key challenges faced by companies in implementing AI revolve around data availability and quality (68%), as well as cybersecurity and data privacy (65%).
• Opinions are divided over the impact of regulation, with about 50% perceiving current regulations in Hong Kong to have a neutral effect on the use of AI. However, one third believe that current regulations tend to be restrictive (35%), twice as many as those who view regulations as promoting AI adoption (16%).
• To strike a balance between innovation and risk while promoting the development of AI in the FS industry, Hong Kong should implement changes within its regulatory environment. Chief among these is the implementation of a robust data governance framework (80%), regulatory sandboxes for testing and deploying AI technologies (77%), and a designated regulatory framework for responsible AI use (76%).
• When evaluating Hong Kong's preparedness for further AI adoption, the region appears to be well-positioned in terms of investor awareness and acceptance (68%), and access to capital for investing in AI projects (62%). This reflects confidence in Hong Kong's status as a prominent global financial hub. However, one in four (27%) respondents believe that Hong Kong is not adequately prepared for future AI adoption in terms of workforce availability and readiness. 
• To fully leverage its standing as an international financial centre and advanced I&T hub, Hong Kong can adopt several strategic measures to foster innovation in AI. These include promoting further use of AI in the FinTech industry (66%), encouraging data sharing and open APIs (65%), strengthening Hong Kong’s AI regulatory framework (65%), setting up policies to attract and nurture AI-related talent (55%), and collaborating with Shenzhen and other GBA cities (54%) to develop innovative solutions.

Notes to editors 

About the survey

The Hong Kong Trade Development Council (HKTDC), in collaboration with PwC Hong Kong (PwC) as the exclusive Knowledge Partner of the Asian Financial Forum (AFF), launched an online survey to explore the prospects of and opportunities arising from AI-led transformation in the financial services industry in the eyes of the business community, and the roles Hong Kong can play to facilitate future development in this area. The survey fieldwork was conducted in December 2023, where the views of 86 senior executives based in Hong Kong were collected through a short online survey.