Malaysia among top 3 markets worldwide for AI use in finance

Malaysia has emerged as one of the top three global markets for the adoption of artificial intelligence (AI) in the finance sector, according to a recent survey conducted by HSBC Malaysia. The survey, which polled around 10,000 affluent and high-net-worth individuals across 10 markets, revealed that Malaysia's AI adoption rate in finance stands at 85%, surpassing the global average of 73%. This rate matches that of China, while India follows at 86%.

Despite this growing AI adoption, a significant percentage of Malaysia's affluent and high-net-worth investors still rely heavily on human professional judgement. Over half of these investors (58%) favor a hybrid approach that combines AI tools with the expertise of financial professionals and institutions when making decisions. This underscores the importance of human oversight in the AI-driven financial landscape.

The survey, commissioned by HSBC and carried out by the global market research firm Ipsos, also identified generational differences in AI usage among affluent and high-net-worth investors. Generation Z (21-29 years old) and millennials (30-45 years old) are the most active users of AI for financial and investment decisions, with 86% and 89% respectively. Generation X (46-61 years old) follows closely with 85% AI usage, while baby boomers (62-69 years old) lag slightly behind with 78%.

Despite the reliance on AI, respondents emphasized the continued influence of human expertise. Financial professionals and institutions were identified as the primary source of investment ideas (65%) and the most influential factor in investment decisions (39%). Investors acknowledged the need for human reassurance and strategic expertise, particularly in detecting errors in AI-generated data, interpreting complex data, and applying judgment and validation.

A majority of Malaysians (58%) envision a future financial decision-making approach that integrates human-AI partnerships. For Generation Z, this includes utilizing AI for portfolio performance analysis (61%) and generating new investment ideas (57%). Millennials also show similar patterns, with 53% using AI for portfolio performance analysis and 53% for generating investment ideas.

AI adoption in Malaysia has been associated with shifts in investors' sentiment. Seventy-seven percent of respondents reported feeling more in control of their investments due to AI, compared to 21% who felt less in control. Moreover, over half (54%) of investors expressed that AI makes them more willing to take calculated risks, more than double the 25% who indicated AI made them more cautious.