Hong Kong Releases Generative AI Guidelines to Protect Consumers

The Hong Kong Monetary Authority (HKMA) has released a set of guidelines for the use of generative AI (GenAI). It said the rules are meant to protect consumers, especially in the banking sector.

The HKMA released the guidelines in view of the development of big data analytics and artificial intelligence. The guidelines mainly focus on four key areas, including governance and accountability, fairness, transparency and disclosure, and data privacy and protection.

The monetary authority realized a surge in GenAI interest in the banking sector. Even though there are quite a few perks to the use of GenAI, HKMA cited the chance for potential risks, including a lack of explainability and hallucinations.

Regulator asks for transparency in generative AI use in Hong Kong

According to a survey conducted by the HKMA, around 75% of the authorized institutions in Hong Kong either use or plan to use AI for their operations. Additionally, 39% of the surveyed institutions shared that they have adopted or plan to adopt generative AI in general banking products and services provision.

Alan Au, the executive director of the banking conduct of the HKMA, stated that the board of the authorized institutions should be accountable for all generative AI-driven processes and decisions.

Alan also stressed the necessity for careful consideration of GenAI’s potential impact on customers via an appropriate committee. Secondly, Alan stated that the institutions should ensure that GenAI models produce consistent, ethical, and objective outcomes for customers.

The HKMA executive director also stressed the importance of transparency and disclosure. “Authorized institutions should provide an appropriate level of transparency to customers regarding their GenAI applications through proper, accurate and understandable disclosure,” Alan stated.

The fourth area that HKMA released guidelines on is data privacy and protection. Alan stressed that institutions should have the necessary protection measures to keep customer data safe. Additionally, if generative AI applications are used to collect and process personal data, the institutions should comply with the personal data ordinance.