A study by the Hong Kong Institute for Monetary and Financial Research (HKIMR) shows that the adoption of generative artificial intelligence (genAI) in Hong Kong’s financial services is rising.

Currently, 75% of companies surveyed are designing or implementing at least one use case. This number is expected to grow to nearly 90% in the next three to five years.

Larger financial institutions are leading the way, with 83% having initiated genAI projects, compared to 63% of smaller firms.

The survey gathered responses from 55 entities in the insurance, wealth, and asset management sectors. These sectors represent 57% of total banking deposits and 48% of gross insurance premiums.

Enoch Fung, CEO of the Academy of Finance and executive director of HKIMR, said genAI could enhance customer experience and improve efficiency in managing digital information.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Hong Kong emerges as a global leader in financial GenAI adoption

Hong Kong’s financial sector is adopting generative AI at an unprecedented rate compared to global counterparts, with 38% of institutions already rolling out GenAI initiatives, significantly higher than the global average of 26% and more than double Singapore’s 16% adoption rate 1.

This leadership position is reinforced by remarkable industry consensus, with only 1% of Hong Kong financial institutions expressing no interest in the technology 1.

The current 75% implementation rate, projected to reach 90% within five years, demonstrates an accelerating trend that positions Hong Kong as a potential global hub for AI-powered financial innovation 2.

The region’s enthusiastic embrace of GenAI aligns with its approach to other financial innovations, with 95% of Hong Kong executives viewing Banking as a Service and embedded finance as growth generators 1.

This aggressive adoption suggests Hong Kong is positioning itself as a testbed for how GenAI can transform financial services, potentially providing early competitive advantages for institutions operating in the region.

2️⃣ Financial institutions prioritize operational efficiency over customer-facing applications

Despite GenAI’s potential to enhance customer experiences, 80% of current use cases in Hong Kong’s financial sector focus on internal operations rather than customer-facing applications 3.

This cautious approach reflects concerns about technological maturity, with institutions primarily leveraging the technology for research, analysis, and back-office functions while waiting for greater reliability before deploying customer-facing solutions 3.