Photo credit: Cyberport

In February, Hong Kong authorities disclosed plans to increase artificial intelligence use in the region, including setting up an AI supercomputing center for research and development. Now, they have launched an initiative to tap into the emerging technology in the financial sector.

More recently, the Hong Kong Monetary Authority (HKMA), the city’s central banking institution, has partnered with local tech hub Cyberport to launch a generative AI sandbox aimed at fostering responsible adoption of the technology within the banking sector, the regulator announced on Aug. 13.

Officials unveiled the sandbox at the “FiNETech2 – Into the A.I. verse” conference, where it was presented as a controlled environment for banks to experiment with AI applications, addressing areas such as risk management, fraud detection, and customer service.

Underscoring the importance of the initiative, HKMA Chief Executive Eddie Yue emphasized the sandbox’s role in promoting “responsible innovation,” enabling banks to explore AI’s potential while managing associated risks. The authority will offer technical support and regulatory guidance to participating institutions.

The move comes as financial centers worldwide grapple with the transformative potential of revolutionary technologies like AI and blockchain. Earlier this year, the government committed $3 billion Hong Kong dollars ($383 million) to the Cyberport business park as part of a three-year AI subsidy scheme. Authorities said the tech hub is poised to build an AI supercomputing center to power AI research in the region.

Technology testing environments are also being explored in the realm of Web3, with the HKMA launching a sandbox for stablecoin development and use and announcing its first batch of participants in July.

Yielding further innovation, the generative AI sandbox builds upon the success of the inaugural FiNETech event in April. Upcoming editions will reportedly focus on green technology and distributed ledger technology (DLT).

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