Exclusive | HKMA in talks with SFC, Insurance Authority to promote fintech over next 5 years The Hong Kong Monetary Authority (HKMA) expects to work with other financial regulators to promote artificial intelligence adoption in various sectors over the next five years and further advance fintech development, according to the head of the city’s de facto central bank. Under the five-year plan called Fintech 2030 that starts this year, the HKMA would expand the scope of the city’s generative AI sandbox to include more industries as a step towards enhancing risk management, fraud detection and customer experience, chief executive Eddie Yue Wai-man told the Post in a written interview. “Ongoing discussions are being held with financial regulators, including the Insurance Authority and the Securities and Futures Commission, to broaden the initiative’s reach and encourage wider industry adoption and knowledge exchange,” Yue said. “The diversity of perspectives from various sectors can lead to more creative and effective solutions, particularly in the rapidly evolving field of AI. Different sectors also have access to different types of data, which can be valuable for training and improving AI models.” Fintech 2030 marked the third stage of the city’s fintech strategy for the financial sector, following earlier initiatives in 2021 and 2017. Citing an example of potential collaborations, Yue said a bank had partnered with a telecommunications service provider to explore cross-sectoral anti-fraud measures. He did not identify the two firms. Another initiative, Project Noor, aims to develop a bespoke AI model auditing prototype. It would equip both banks and regulators with the transparency, metrics and workflows to oversee AI-powered banking operations, according to the HKMA, which collaborates with the Bank for International Settlements Innovation Hub and the UK Financial Conduct Authority. The HKMA in 2017 introduced the first phase of the city’s fintech development, which resulted in the launch of the Faster Payment System in 2018 and the grant of licences to eight digital banks in 2019. The second phase in 2021 stressed fintech’s practicality. While those two stages focused on payment infrastructure and online banking, Fintech 2030 is expected to drive more collaboration between banks and other sectors. The HKMA unveiled Fintech 2030 in November with a focus on DART – an acronym for data, AI, resilience and tokenisation. There are more than 40 initiatives under its five-year road map. “We need to strengthen our economy’s ability to share, verify and use data securely and efficiently.” To ensure better use of data and AI, Yue said Hong Kong would continue to build its next-generation data infrastructure, while further promoting the use of data to help small and medium-sized enterprises turn their transaction records into bank loans via the Commercial Data Interchange (CDI). Tokenisation was expected to be another key development, according to Yue. Banks and fund houses would be encouraged to use tokenised deposits in tokenised money market fund transactions, while managing liquidity and treasury requirements in real time. The HKMA and the Hong Kong University of Science and Technology Business School have also jointly worked on cybersecurity research to ensure the resilience of the city’s fintech sector. On emerging technology such as quantum computing, which remains in the early stages of development, Yue said its “potential to impact current encryption methods for data protection and online authentication has been widely acknowledged”. While Fintech 2030 provided a clear road map for the city to develop this field, Hong Kong faced keen competition from Singapore and other major cities, according to Benjamin Quinlan, CEO and managing partner at Hong Kong-based consultancy Quinlan & Associates. Still, Yue expressed confidence about Hong Kong’s competitiveness. Hong Kong secured the world’s top fintech ranking for the first time in the Global Financial Centres Index in September, while Singapore ranked fourth, according to the report by Z/Yen and the City of London, which tracked 116 centres based on criteria like regulations, access to finance and talent. https://www.scmp.com/business/banking-finance/article/3338531/hkma-talks-sfc-insurance-authority-promote-fintech-over-next-5-years (ICE HONG KONG)

Fonte notizia: South China Morning Post