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HKMA to issue AI governance guidelines for banks, stresses human oversight remains crucial
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Hong Kong Monetary Authority (HKMA) Deputy Chief Executive Arthur Yuen stated at the Hong Kong Banker Summit that AI is no longer just an assistant in decision-making and actions but can execute tasks. He expressed concern about how banks can effectively govern AI, enhance technical resilience to keep pace with an increasingly complex environment, build a trustworthy tokenization framework, and ensure data quality. Yuen announced that HKMA will release practical application guidelines to help banks translate data excellence principles into concrete actions. He emphasized that while AI can provide decision-making solutions and execute some processes, not every application scenario needs automation or autonomy, and human oversight remains crucial, with humans ultimately making decisions and bearing responsibility. Regarding tokenization, Yuen noted it creates opportunities for banks by making value transfer programmable, but stressed that trust cannot be sacrificed, and all blockchain transactions must be authentic, accurate, and authorized. He also stated that frontier AI models have not fundamentally changed cyber risk management, but standards need adjustment to address faster and larger-scale cyberattacks. HKMA has been guiding the industry on these risks and expects banks to strengthen cybersecurity controls and assess third-party service risks. HKMA's generative AI sandbox launched years ago has tested over 40 use cases, half of which have been productized.
Source report
Hong Kong, [Date] – Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA), stated at the Hong Kong Bankers Summit that artificial intelligence (AI) is no longer merely a support tool but is now capable of executing decisions and actions.
Yue highlighted several key areas of focus for the HKMA:
- How banks can effectively govern AI
- How to enhance technological resilience and ensure banking systems evolve in tandem with increasingly complex environments
- How to build a trustworthy tokenization framework
- How to ensure data quality
He also announced that the HKMA will issue practical application guidelines to help banks translate data excellence principles into concrete actions.
Human Oversight Remains Essential
Yue noted that while AI can provide decision-making options and execute certain processes, not every application scenario needs to be automated or autonomous. He emphasized the importance of human oversight, stressing that humans must ultimately make decisions and bear responsibility.
Tokenization: Opportunities and Trust Challenges
Tokenization enables programmable value transfer, transforming how transactions are structured and how financial services are delivered to users, creating significant opportunities for banks. However, Yue cautioned that trust must not be compromised. All blockchain-based transactions must be accurate, authentic, and authorized.
Cybersecurity and Third-Party Risk
The HKMA maintains that frontier AI models have not fundamentally changed the landscape of network risk management. However, standards must be adjusted to address faster and larger-scale cyberattacks. The authority is actively guiding the industry to manage these risks and expects banks to strengthen cybersecurity controls. Banks must also assess whether third-party service providers have adequate risk management measures in place and whether such arrangements could create backdoor attack risks.
Generative AI Sandbox Results
Yue mentioned that the HKMA launched a generative AI sandbox several years ago, testing over 40 use cases. Half of these have already been productized.
Source
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HKMA to issue AI governance guidelines for banks, stresses human oversight