To avoid bias in customer-facing banking applications, the Hong Kong Monetary Authority (HKMA) issued new generative artificial intelligence (GenAI) guidelines as more banks adopt such technologies. In a mid-August notice, the territory’s de facto central bank said financial institution boards and senior management should “remain accountable for all the GenAI-driven decisions and processes.”
Banks seeking to use GenAI in their products should follow a range of principles—including ensuring that clients can opt out of using the technology and that AI models do not disadvantage or lead to an unfair bias toward certain client groups.
Although suggestions presented in 2019 in a set of principles for institutions using AI still broadly apply, HKMA is pushing for further measures to address risks particular to GenAI, which could potentially have an “even more significant impact on customers,” the banking watchdog said. The guidelines arrive against a backdrop of HKMA noting growing interest in GenAI from the city’s banks. Locally, 39% of the authorized institutions the regulator surveyed are already using GenAI or are planning to use it.
Yet, the use of AI by Hong Kong banks, popularized by OpenAI’s ChatGPT, is still in its nascent stages, the regulator said, adding that most firms currently use “off the shelf” third-party solutions for business functions such as internal chatbots, coding, translation and summarization. In time, use-cases could expand to include robo-advisers and customer-facing chatbots in private banking, wealth management and insurance, HKMA said.
In mid-August, HKMA launched a GenAI sandbox with the government-funded incubator tech hub Cyberport. The aim is to let financial institutions pilot use-cases within a risk-managed framework and with technical assistance. Details of the sandbox’s application process are pending.
Although regulators try to keep pace with technological development by issuing nonbinding guidelines, the territory lacks GenAI rules and regulations. In June, the Office of the Privacy Commissioner for Personal Data, Hong Kong’s privacy regulator, issued its first personal-data protection guidelines for firms using GenAI services. The privacy regulator urged companies to establish internal AI governance committees that directly report to their boards.