Hong Kong issues generative AI guidelines for consumer protection

Arijit Sarkar46 minutes agoHong Kong issues generative AI guidelines for consumer protectionThe HKMA introduces new principles for using generative AI, emphasizing governance, transparency, and data protection in consumer-facing applications.222 Total views2 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onThe Hong Kong Monetary Authority (HKMA) issued guiding principles for generative artificial intelligence use in consumer-facing applications to safeguard end-users. 

The HKMA, Hong Kong’s central banking institution, introduced reforms to its preexisting four pillars of guidance on the use of generative AI (GenAI) in a circular issued to authorized institutions, mainly comprised of banks.

The new principles were added to the four central pillars — governance and accountability, fairness, transparency and disclosure and data privacy and protection — initially introduced for big data analytics and AI in November 2019.Hong Kong banking sector prefers generative AI for customer interaction

According to Alan Au, the executive director of the HKMA’s banking conduct department, generative AI adoption among banking institutions for customer-facing applications has skyrocketed in recent months. “Potential applications include but are not limited to customer chatbots, customized product and service development and delivery, targeted sales and marketing, and robo-advisors in wealth management and insurance.”

Noting the related consumer protection implications, Au recommended several principles for GenAI, including providing transparency to end-users through understandable disclosures.

Additionally, the HKMA expects the board and senior management to be fully accountable for any GenAI-related decisions. GenAI models used in consumer-focused applications must also ensure fair and consistent outcomes.

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Lastly, the HKMA asked authorized institutions to pay special attention to safeguarding customer data.Hong Kong inaugurates gen AI sandbox for banks

On Aug. 13, the HKMA recently launched a generative artificial intelligence (GenA.I.) sandbox for finance in collaboration with Cyberport, a state-run technology company.Source:Hong Kong Cyberport Management Company Limited (Cyberport)

Hong Kong’s GenA.I. sandbox is a platform to test AI’s potential applications in finance, including risk management, anti-fraud, customer services and process re-engineering. Carmen Chu, the executive director at HKMA, explained:“This new sandbox aims to overcome the “hard” and “soft” barriers to the adoption of GenA.I., that is, the demand for computing capabilities and the need for supervisory guidance.”

The GenA.I. sandbox aims to empower banks to pilot their novel GenA.I. use cases within a risk-managed framework supported by essential technical assistance and targeted supervisory feedback.

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