By Cally Chan, General Manager of Microsoft Hong Kong and Macau
The adoption of generative AI technology is rapidly changing the way businesses operate, and the financial sector is no exception. In Hong Kong, over 80% of Microsoft’s enterprise users are actively exploring the potential of AI. The city is an innovation and technology (I&T) and financial center with a digitalized economy and advantageous geographical location. It offers unparalleled opportunities for financial institutions to seamlessly integrate AI into their business workflows, and continues to offer a solid base for expansion into Asian and global markets.
With its world-class financial and technical infrastructures, robust regulatory environment, and abundant business opportunities and funding support, Hong Kong has solidified its position as a leading hub for fintech development. Hong Kong is home to over 800 fintech companies and 3,900 startups, and ranked first in Asia-Pacific on the Global Fintech Index 2021.
A global McKinsey survey released in August revealed that more than 70% of respondents across industries have already embraced generative AI in their work. Among them, the technology, media, and telecom industries had a particularly high adoption rate of 88%, followed closely by financial services at 82%, highlighting the potential of generative AI to support financial and wider technological innovation.
Generative AI empowers finance and banking with enhanced security and efficiency
The increasing regulatory complexities and data security concerns have always been a challenge for the financial services and banking industries. By harnessing enterprise-grade AI solutions, businesses can strengthen regulatory compliance measures, ensure data security, and streamline processes for improved accuracy and efficiency. Generative AI has vast potential to automate lower-value tasks in risk management, including reporting, monitoring regulation, data collection, and identifying compliance issues. This enables better and faster data processing, cost reduction, and an enhanced focus on risk mitigation for financial institutions.
FORMS Syntron, a fintech thought leader, incubator and enabler in the banking and finance industry, and the Bank of East Asia, for example, have collaborated to build a compliance application using Azure OpenAI Service to conduct C-RAF assessment. The application can analyze complicated documents from multiple sources and automate compliance evaluation with fine-tuned generative AI prompts. It enhances the bank’s risk management practices by increasing efficiency, consistency and readiness to deal with the growing complexity of regulatory compliance.
In a separate example, Fano Labs, a company specializing in language technology, uses AI to analyze customer interactions and discover business insights, improving operational efficiency for contact centers. A global bank has adopted Fano Labs interaction analytics platform to enhance its sales compliance process. The platform used language AI to analyze the banks’ interactions with customers, and identify potential mis-selling practices.
A remedy for talent and resource shortages in the digital economy
Hong Kong’s technology and financial industries have long faced a talent shortage. The rapidly growing digital economy demands professionals with expertise in emerging technologies, AI, and financial innovation. Generative AI technology offers solutions to bridge talent and resource gaps, augment the workforce, and optimize resource allocation for maximum efficiency. By relieving people of repetitive tasks, generative AI allows them to focus on where they can add true value — strategic initiatives that require specialized expertise. Therefore, learning how to effectively use AI as a copilot to reduce workload and insert effective prompts becomes imperative.
For instance, livi bank, a Hong Kong-headquartered virtual bank, has been actively exploring the use of large language model to see how it could improve efficiency and enhance their customer experience. Similarly, virtual insurer OneDegree applies generative AI in pilot to empower non-technical users to input prompts in plain language and code critical tasks like pricing, underwriting, and claims rule configuration. This approach helps produce precise code, reduces IT resource dependency, and accelerates time-to-market.
Additionally, the eight University Grants Committee (UGC)-funded universities in Hong Kong have adopted generative AI powered by Azure OpenAI Service, aiming to prepare students to use AI effectively in their studies and prepare for future careers. This approach ensures that students acquire AI proficiency, readying them to navigate tasks and excel in an AI-driven world.
Embrace generative AI for a stronger financial future
The financial services industry has shown a heightened interest in AI, recognizing its potential to revolutionize digital wealth management, increase customer engagement and operation efficiency, and automate the tracking of regulatory compliance changes, among other applications. Those who can successfully integrate AI to simplify, enhance, and secure banking and finance operations will emerge as winners in the digital economy.
Data privacy and security are crucial when using AI in the workplace, particularly in the financial sector. To safeguard data and prevent any potential leakage, businesses should adopt enterprise-grade AI solutions as early as possible. With Microsoft’s enterprise-grade security measures and Responsible AI framework, businesses can ensure that their data is well protected and used correctly. Now is the time to embrace generative AI and harness its transformative power for the betterment of your business and the industry at large.
