Fintech has been one of the HKMA’s work priorities in recent years. Over the last few years, we have introduced many new initiatives, including the widely known Faster Payment System and the virtual bank licensing regime, to encourage banks to apply new technologies in offering customers more quality and convenient services and, at the same time, to promote financial inclusion. Earlier this month, the HKMA published a report on the application of artificial intelligence (AI) technology in the banking industry. We found out that almost 90% of the retail banks have adopted or planned to adopt AI. This finding indicates that Hong Kong’s banking industry has gradually adapted to this digital era and is making good progress through the use of innovation and technologies.
While the banks are adopting new technologies, the HKMA has also been transforming ourselves to put technology and data science into better use. Indeed, the HKMA has always been using and analysing various types of data. Nonetheless, with substantial improvements in computing power and rapid reductions in data storage cost, many institutions have begun to explore ways to enhance efficiency by applying data science. The HKMA is no exception. We embarked on a series of studies last year on how to make use of new technologies. The studies mainly concern data collection from a variety of sources, followed by the use of advanced technology to analyse the data, with a view to strengthening our regulatory capability and improving the efficiency of our daily operations. Through the exchanges with a number of central banks and regulators around the world, we all came to the conclusion that data science would be capable of providing analyses that could improve risk assessment and policy-making.
The HKMA’s digital transformation covers multiple functions, including banking supervision, anti-money laundering, financial stability surveillance, economic research, and reserves management. In the near future, the HKMA plans to introduce a number of new initiatives to implement the transformation. Take banking supervision for instance. The HKMA is collecting more granular data from banks so as to obtain a fuller and more up-to-date picture on the state of their businesses. We hope that, in the long run, the use of new technology will replace the current requirement for banks to submit template-based regulatory reports, thereby lessening their reporting burden. This will be a win-win outcome for the HKMA and the banking industry.
The new measures will not only cut across different departments within the HKMA, but also hinge on close co-operation from the banking industry, public sector and various service providers. In view of critical issues such as data security and privacy, the HKMA has put in place stringent mechanisms for the new data and procedures. I believe that the progressive development of these initiatives will ultimately bring profound changes to how we work as a central banking institution and a regulator, and will further enhance our efficiency in carrying out our duties.
It is crucial that our talents and organisational structure keep pace with the technological changes. As such, the HKMA is going to set up a new “Digitalisation Office”. As its name suggests, the new office is tasked with overseeing the entire digital transformation work to help the HKMA become a more data-driven regulator. We will bring in talents in data science to work on data processing and analyses in close collaboration with other HKMA departments. The Digitalisation Office will also formulate a long-term digital development strategy for the HKMA and promote a culture of technology within the organisation.
The digital transformation of the HKMA is a quest we have just set in motion. We welcome any aspiring talents to join the Digitalisation Office and dedicate themselves to the digital transformation journey of both the HKMA and the banking industry. Please visit our webpage on current vacancies for more details.
Deputy Chief Executive
Hong Kong Monetary Authority
21 January 2020