FI Column｜Financial Technology and Privacy Protection｜Cui Tianwei
As one of the international financial centers, Hong Kong’s SAR government actively promotes the development of financial technology to maintain competitiveness. In 2024, the Hong Kong Monetary Authority (HKMA) launched the FiNETech series of events, bringing together about a hundred banks, securities companies, insurance companies and technology companies to jointly explore wealth technology, insurance technology, green technology, artificial intelligence (AI) and distribution collaboration on digital ledger technology (DLT).
At the same time, the Office of the Privacy Commissioner for Personal Data (PCPD) recently released "Artificial Intelligence (AI): Model Framework for Personal Data Protection" to address the challenges posed by AI to personal data privacy. The Model Framework provides internationally recognized recommendations to guide organizations in complying with the relevant provisions of the Personal Data (Privacy) Ordinance when using AI technology.
How do these two initiatives complement each other to promote the development of financial technology and privacy protection in Hong Kong?
FiNETech activities aim to promote the widespread application of financial technology and provide a platform for cooperation and innovation. The Hong Kong Monetary Authority has pushed banks to further research and apply more complex AI technologies, such as deep learning and unsupervised learning models, while focusing on the potential of DLT in cross-border payments and transaction settlement. Recently, it has been pointed out that AI-generated content may involve a large amount of personal data. Banks and technology companies at FiNETech events can collaborate to develop more advanced AI models and improve the quality and accuracy of generated content. The Office of the Privacy Commissioner's "Model Framework" provides clear guidance for the application of these technologies to ensure that the privacy of personal data and data security can be effectively protected during the innovation process.
Through the FiNETech platform, the Hong Kong Monetary Authority promotes cooperation between banks and technology companies to jointly develop and apply advanced AI and DLT technologies, which not only improves the technological level of banks, but also drives the development of the entire financial technology industry.
Following the "Model Framework" can ensure that AI models follow the best practices in privacy protection when using and managing data to avoid data leakage and abuse; it can also ensure that financial institutions do not neglect personal data while achieving technological innovation. Protection of privacy.
In order to further promote the development of fintech and privacy protection in Hong Kong, the HKMA should (1) encourage banks to cooperate with local and international fintech companies to jointly develop new technologies and applications; (2) promote banks to conduct in-depth research and apply more complex AI technologies, such as deep learning and unsupervised learning models, while paying attention to the potential of DLT in cross-border payments and transaction settlement in Hong Kong; (3) Strengthening cooperation with the Securities and Futures Commission, the Insurance Regulatory Authority and other institutions to jointly promote The development of financial technology in various financial fields.
However, the rapid development of financial technology also brings new security risk issues such as data security, cyber attacks and financial fraud. The Monetary Authority should take a variety of safeguard measures, including strengthening network security protection, adopting advanced network security technologies that are in line with national security, etc., to ensure that financial technology develops under the premise of safety and control. In terms of supervision, the Hong Kong Monetary Authority should establish a comprehensive regulatory framework to conduct real-time monitoring and evaluation of large and small applications of financial technology, and promptly discover and solve potential problems.
The above-mentioned measures complement each other and provide comprehensive support and guarantee for Hong Kong's financial technology ecosystem. Hong Kong is expected to further consolidate its position as an international financial technology center and maintain its competitive advantage.
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