The Hong Kong Monetary Authority (HKMA) announced that the countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1.0%. HKMA also announced the publication of a report that offers a regional perspective on artificial intelligence and big data in the financial services industry. The report was released by the Hong Kong Institute for Monetary and Financial Research (HKIMR), which is the research arm of the Hong Kong Academy of Finance (AoF). Among other factors, the report presents and discusses the results of an HKIMR survey that gathered market participants’ views on the status, benefits, challenges, and risks of artificial intelligence/big data adoption as well as on the demand for talent.
The report discusses the adoption of artificial intelligence and big data in six major financial centers in the Asia Pacific (Hong Kong, Shanghai, Shenzhen, Singapore, Sydney, and Tokyo) across four main financial services sectors (asset management, banking, insurance, and securities trading). The report describes the recent transformation of the financial services industry using artificial intelligence and big data technologies and highlights the role of talent integrating these new technologies into the financial services industry’s core business functions. It explores market participants’ views on artificial intelligence/big data adoption and the demand for talent in major Asia-Pacific financial centers in a survey commissioned by the HKIMR. The following are the key findings of the survey:
- ~71% of firms across sectors of the financial services industry in the region have either adopted or planned to adopt artificial intelligence/bigdata technologies in the next 12 months.
- Financial institutions in Hong Kong, and Asia Pacific, that have adopted artificial intelligence/big data technologies gained insights leading to better products and services as well as made better decisions thanks to enhanced modeling and automated repetitive activities to enable staff to use their time more productively.
- Market participants highlighted that artificial intelligence/big data adoption adoption has brought them various benefits, but they were also concerned about talent shortages, data issues, business-technology integration and adoption costs. The participants indicated that the aforementioned challenges are likely to persist over the next five years.
- Market participants identify clear benefits from artificial intelligence/bigdata adoption, but they also highlight that the shortage of talent is one of the key challenges now and in the next five years.
The report also presents the views of market participants on promoting talent development and reviews the relevant initiatives implemented internationally and in Hong Kong. The report concludes with suggestions aimed to enrich Hong Kong’s pool of talent, including strategies to narrow the existing talent gap, support talent recruitment, and foster talent development.
Keywords: Asia Pacific, Hong Kong, Banking, Artificial Intelligence, Big Data, CCyB, Regulatory Capital, Fintech, Basel, Regtech, Credit Risk, HKMA
Previous ArticleEBA Proposes to Amend Open Standards Under PSD2
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.