Artificial intelligence (AI) will redefine financial services in Hong Kong, and commercial banks must prepare for the AI revolution, the city-state’s central bank says.
In its latest guidance, the Hong Kong Monetary Authority (HKMA) discussed manpower management in the age of AI, acknowledging that the technology is taking root in the state’s banking industry. Banks are leveraging it to provide customized services for their clients and process massive amounts of data to detect fraud.
While it welcomes the advancements, the regulator says banks must weigh AI’s impact on their workforce.
#AI is reshaping the nature of some traditional jobs in #banking whilst giving rise to new jobs. Some banks have already reskilled their staff for new roles. pic.twitter.com/QkbNDcRHHs
— HKMA 香港金融管理局 (@hkmagovhk) May 23, 2024
Technological disruptions are nothing new in banking. When ATMs were introduced in the 1980s, they sparked a shift from cash handling to client relationship management roles, which improved the industry. The HKMA believes that AI can have the same impact if handled properly.
AI-related job losses are not unique to banking and finance. In January, the World Economic Forum (WEF) estimated that the technology could replace 85 million jobs over the next two years. Goldman Sachs (NASDAQ: GS) projected that AI would lead to the loss of 300 million jobs in the long term.
To account for the disruptions, the HKMA called on Hong Kong’s banks to prepare their workforce by retraining and upskilling them for the AI era.
“The key is enhancing the professional knowledge and skill sets of employees, enabling them to complement and co-exist with technology in the AI era. By effectively utilising innovative technology, banks can also enhance customer experience. This will create a ‘triple-win’ outcome for bank staff, customers and the banks themselves.”
The regulator urged banks to set a clear future direction for staff development and allocate enough resources.
For its part, the HKMA pledged to conduct in-depth research on AI’s impact on banking and the future skills gap so that the city-state can keep up with other financial centers.
While AI is improving banking in Hong Kong, sophisticated AI-linked scams are also wreaking havoc on the sector. The state is one of the top five markets in Asia for identity fraud, and coupled with a thriving digital payments industry, it has been fertile ground for scammers. One study revealed that in Q1, fintech fraud surged 216% faster year-on-year, with AI playing a pivotal role.
In one incident earlier this year, a clerk at a multinational bank was tricked into transferring $25 million to scammers who impersonated senior management through AI deepfakes.
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