'A technological revolution': Is Hong Kong ready for AI?

HONG KONG, China — The AI (artificial intelligence) era is here.  At least, based on a joint survey conducted by Hong Kong Trade Development Council (HKTDC) and PwC.  

PwC Asia Pacific and China Chairman Raymund Chao presented the survey’s key findings as well as other insights into AI at the Asian Financial Forum (AFF) on Wednesday

The survey, conducted online in December 2023, aimed to assess Hong Kong's AI competencies within the country’s financial services, shedding light on both the challenges and opportunities organizations encounter in integrating AI in their businesses. 

 In his presentation at the Hong Kong Exhibition and Convention Centre, Chao noted that the survey found Hong Kong to be on equal footing with other financial hubs in the global race for AI, emphasizing the city's financial services industry as a prime environment for AI adoption. 

Financial evolution of AI 

Chao also discussed the financial implications of the advancement of AI and how the upcoming years will see drastic growth in revenue opportunity from the use of AI softwares.

By 2026, global sales from AI is projected to reach US $900 billion which will reflect close to a 20% increase from 2020 which saw US $380 billion.  There is also an upward trend observed when it comes to private investments in AI products.

“In 2013. private investment in AI stood at 3.1 billion US dollars.  If we fast forward that to 2022, that figure has skyrocketed to an astonishing 92 billion US dollars,” Chao said.

This number is expected to increase to US $200 billion in 2025. “That is just over one year from now,” he said.

Survey says

The survey findings revealed extensive integration of AI into various financial service areas in Hong Kong, particularly in virtual assistants, fraud detection, and authentication of biometric data.

Respondents, which were 86 Hong Kong-based senior executives,  see the country to be in sync with global AI development in the financial services industry, with over 60% foreseeing significant opportunities in automated and algorithm-based trading, more efficient AI customer service, enhanced fraud detection and streamlined insurance claims processing. 

But, companies implementing AI encounter primary challenges related to data availability and quality, along with concerns about cybersecurity and data privacy. 

Opinions, however, differ on whether Hong Kong regulations have an impact on AI usage with approximately 50% viewing current regulations as having a neutral effect on it.

The results also showed a call for regulatory adjustments, including the establishment of a robust data governance framework and a dedicated regulatory framework for responsible AI use. 

Even with Hong Kong's apparent advantage in investor awareness and access to financial capital for AI projects, there are reservations about workforce readiness.

In order to fully maximize AI’s potential, the survey results suggested strategic measures such as furthering AI use in the Financial Technology industry, promoting data sharing, and formulating policies to attract and cultivate AI-related talent are recommended.

Undeniable future with AI

Given that AI seems to just be evolving and integrated more into businesses, Chao stressed the need for business reinvention to respond to AI.

“Looking at business models, products and services, and alterations, understanding the impact as well as the opportunity and harnessing the power of AI to respond to the constantly evolving landscape.” 

He further underscored the need for a “collaborative, responsible, human-led and tech-enabled approach to AI” which will open doors to “tremendous opportunities for a shared tomorrow.”

“Are you ready to reinvent or will you be left trailing behind as others drive towards the future?” Chao asked.