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The Hong Kong Monetary Authority (HKMA) has issued guiding principles for generative artificial intelligence use in consumer-facing applications to safeguard end-users.&nbsp;
The HKMA, Hong Kong’s central banking institution, introduced reforms to its preexisting four pillars of guidance on the use of generative AI in a circular issued to authorized institutions mainly comprised of banks.
The new principles were <a data-ct-non-breakable="null" href="https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2024/20240819e1.pdf" rel="null" target="null" text="null">added</a> to the four central pillars initially introduced for big data analytics and AI in November 2019: governance and accountability, fairness, transparency and disclosure and data privacy and protection.
<h2 id="hong-kong-banking-sector-prefers-generative-ai-for-customer-interaction">Hong Kong banking sector prefers generative AI for customer interaction</h2>
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.&nbsp;
<blockquote>
 “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.”
</blockquote>
Noting the related consumer protection implications, Au recommended several principles for generative AI, including providing transparency to end-users through understandable disclosures.
Additionally, the HKMA expects the board and senior management to be fully accountable for any generative AI-related decisions. Generative AI models used in consumer-focused applications must also ensure fair and consistent outcomes.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/elon-musk-deepfake-ai-crypto-fraud-hong-kong" rel="null" target="null" text="null">Elaborate Elon Musk deepfake crypto fraud uncovered in Hong Kong</a>
Lastly, the HKMA asked authorized institutions to pay special attention to safeguarding customer data.
<h2 id="hong-kong-inaugurates-gen-ai-sandbox-for-banks">Hong Kong inaugurates gen AI sandbox for banks</h2>
On Aug. 13, the HKMA recently launched a “Generative Artificial Intelligence (GenAI) Sandbox” for finance in collaboration with Cyberport, a state-run technology company.
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 <img alt="Hong Kong issues generative AI guidelines for consumer protection" name="" src="https://s3.cointelegraph.com/uploads/2024-08/asdasdasdasdasd">
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 Source: <a data-ct-non-breakable="null" href="https://x.com/cyberport_hk/status/1823370390581936384" rel="null" target="null" text="null">Cyberport</a>
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Hong Kong’s GenAI Sandbox is a platform to test AI’s potential applications in finance, including risk management, anti-fraud, customer services and process reengineering. Carmen Chu, the executive director at the HKMA, explained:
<blockquote>
 “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.”
</blockquote>
The GenAI Sandbox aims to empower banks to pilot their novel generative AI use cases within a risk-managed framework supported by essential technical assistance and targeted supervisory feedback.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/11-critical-moments-ethereum-history-that-made-eth-no2-blockchain/" rel="null" target="null" text="null">11 critical moments in Ethereum’s history that made it the No.2 blockchain</a>

Hong Kong issues generative AI guidelines for consumer protection

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