The Hong Kong Monetary Authority (HKMA) is conducting a review of the development of digital banking in Hong Kong over the next five to 10 years. The review aims to assess whether virtual banks, which were issued licenses in 2019 and will soon be renamed as digital banks, have achieved the goals of financial inclusion, improved customer experience, competition with traditional banks, and reduced fees. By the end of last year, these digital banks had a combined 2.2 million customers. As part of the review, the HKMA will conduct two surveys on the banking sector to assess talent shortage and how artificial intelligence (AI) will affect staffing [15b2c044].
The HKMA has extended the tenure of its deputy CEO, Arthur Yuen, by two years. Yuen believes in managing risks instead of simply cutting them down in banking regulation. He has emphasized the importance of banks having a secured tertiary data backup (STDB) by the end of the year to enhance their capability to respond to and recover from ransomware attacks. Yuen is also concerned about the rising number of bank scams and has collaborated with Cantopop star Wan Kwong to produce a music video that educates the public about common phishing tactics used by scammers [15b2c044].
The HKMA's focus on digital banking and AI aligns with its efforts to future-proof the financial sector and ensure its competitiveness in the global market. Hong Kong is at the forefront of exploring central bank digital currencies (CBDCs), and the HKMA has been actively testing the use of blockchain technology and issuing consultation papers on stablecoins. These initiatives aim to enhance the city's attractiveness to banking customers and strengthen its position as a global financial hub [7b0ffc87] [15b2c044].