Arthur Yuen: Opening remarks - Hong Kong Monetary Authority (HKMA)-Hong Kong Association of Banks (HKAB) seminar

Good afternoon, all. Recent discussions on quantum computing might have seemed like science fiction. However, today, it is a topic relevant to bankers, risk managers and board directors. Our Artificial Intelligence session last month received a strong response, indicating that the industry recognizes the ongoing technological shifts. I wish to share three observations with you.

Firstly, technological advances, such as AI and quantum computing, are set to transform the banking sector. Instead of questioning whether new technologies will impact banking, we must focus on how to effectively navigate this transition and capitalize on the opportunities without compromising on risk management. These technologies offer banks the potential for faster, more insightful analysis, enhanced services, and improved scalability.

However, with every new capability comes a new responsibility. To fully leverage these advancements, banks must invest in better data management, connectivity, and cybersecurity. Moreover, resilience and security measures must be proactively considered to maintain trust and ensure the future of cryptography.

Secondly, modern banking has always been a people-driven industry. Despite centuries of technological progress, banking relationships are fundamentally based on trust and human interactions. While customers may be more comfortable using chatbots for routine inquiries, they still prefer interacting with a human representative in critical situations.

It is unlikely that customers would feel at ease depositing their money with a fully automated bank. AI applications are continuously improving and have the potential to go beyond simple, programmed tasks, especially when combined with quantum computing. Nevertheless, risks and limitations persist, including potential biases, hallucinations, and misinformation.

Therefore, a human-in-the-loop or human-in-the-lead approach is crucial when designing and operating AI models and applications.

Lastly, I would like to emphasize the importance of reskilling and upskilling the workforce. The future bank will not be built solely by technologists; it will be built by individuals who can effectively integrate technology, business, and trust. As we envision the future of banking, it is essential to recognize that soft skills, alongside technical proficiency, will be equally, if not more, critical in navigating this transformed financial landscape.