Hong Kong financial institutions leading on AI deployment but barriers to tech innovation remain

Hong Kong financial institutions leading on AI deployment but barriers to tech innovation remain

• Finastra survey shows Hong Kong leads global financial hubs, including Singapore, UK and US, in AI deployment plans for next 12 months
• Hong Kong’s enthusiasm for Open Banking is strong, with 9 in 10 institutions looking to use open APIs in the next 12 months
• More than half believe government and industry support for innovation is lacking

 

Hong Kong – May 27, 2020 – A global survey released by Finastra reveals that Hong Kong financial institutions are leading markets including Singapore, the US and the UK in their intentions to deploy Artificial Intelligence (AI). The research found that 58% of financial institutions in Hong Kong are looking to deploy the technology in the next year, at least 11% higher than any other market surveyed.

 

The research was conducted prior to the Coronavirus outbreak amongst 774 financial institutions and banks across the US, UK, Singapore, France, Germany, Hong Kong and UAE, 107 of which are in Hong Kong.

 

Furthermore, the research found that 95% of financial institutions in Hong Kong view fintech collaboration as a contributor to their success. Open Banking and connecting to third parties through open APIs appears to be an accelerating trend, as 89% of Hong Kong respondents either have adopted, are currently adopting or are looking to adopt open APIs in the next 12 months. Around half of those surveyed (53%) said Open Banking is already enabling them to deliver new services and, therefore, new revenue streams.

 

Wissam Khoury, Senior Vice President and General Manager, APAC and MEA at Finastra, said, “Competition from nimble challengers has given incumbents a greater imperative than ever to collaborate with fintechs in order to adopt new, innovative technologies. As our survey has shown, not only are Hong Kong’s institutions leading in their deployment plans for AI in the coming 12 months, they also recognize the importance of Open Banking. These banks will be better placed than ever to modernize their operations and offer new digital services to their customers. The findings indicate a positive direction of travel for Hong Kong’s banking industry and the levels of service that customers can expect to receive in the future.”

 

Whilst collaboration between banks and fintechs in Hong Kong is increasing, barriers persist. Regulatory complexity was cited by half of respondents as the largest barrier – more than any other country in the survey – while 62% believe there is not enough government or industry support to foster innovation.

 

Wissam added, “In a customer-led, highly competitive market such as Hong Kong, the successful adoption of Open Banking – coupled with greater fintech collaboration and technology innovation – will be key to success for its financial institutions. This makes a supportive regulatory framework all the more important. With the right environment, Hong Kong will continue to be an innovation leader in financial services.”

 

About Finastra

Finastra is building an open platform that accelerates collaboration and innovation in financial services, creating better experiences for people, businesses and communities. Supported by the broadest and deepest portfolio of financial services software, Finastra delivers this vitally important technology to financial institutions of all sizes across the globe, including 90 of the world’s top100 banks. Our open architecture approach brings together a number of partners and innovators. Together we are leading the way in which applications are written, deployed and consumed in financial services to evolve with the changing needs of customers.

Learn more at finastra.com

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