Keynote Speech at ALB Hong Kong Regulatory Summit 2026 - “From Principles to Practices”

Introduction

1. Good morning, everyone. It's a pleasure to be with you at the ALB Regulatory and Compliance Summit again.
2. This forum brings together financial professionals, experts, technology partners, and regulators across jurisdictions. And it offers an invaluable platform to explore the future of financial services.
3. Fintech is always at the heart of our conversation on future banking. Regulators help design guardrails and set out guiding principles for responsible innovation, and we see these as important starting points rather than the destination.
4. The questions are: What do these high-level principles mean in practice? How to translate rules into reality? Who will be the winners?

Risk-based approach and Sandbox pilots

1. Let me start with our first topic: applying the risk-based principle in practice. Finance is about risk taking and management, while innovation is about "fail fast". To marry the two, our approach must be interactive and iterative. And for exactly this reason, the HKMA has established platforms like the Generative Artificial Intelligence (GenA.I.) Sandbox and the Supervisory Incubator for Distributed Ledger Technology (DLT).
2. In these risk-controlled environments, we aren't just seeing how fast innovation can go. Banks are actively identifying vulnerabilities, running stress tests so that when pilot use cases are productionised, we know they are safe.
3. These efforts are yielding real results. Through the GenA.I. Sandbox, we're supporting over 40 use cases. More than half of the trials in the first cohort have already been productionised. These aren't just experiments; they are high-impact applications with effective guardrails, covering SME lending, deepfake detection, intelligent chatbots, and more.
4. Recently, we've announced the expansion of the platform to GenA.I. Sandbox++, working together with the other financial regulators to accelerate responsible A.I. adoption across Hong Kong's financial ecosystem.
5. We're seeing the same momentum in the Incubator, where 11 banks are pioneering their DLT-based products. Through targeted feedback sessions, seven tokenised deposit services have been successfully launched.

Governance and business propositions

1. Our second topic is governance: how institutions steer these innovations over the long term. In practice, navigating digital transformation means you can't just look at the road immediately in front of you. Institutions must look at the horizon and strategically assess how technologies like A.I. and DLT will fundamentally change their long-term journey.
2. This means stepping back and reviewing the entire business model - from product offerings and revenue streams, to customer engagement, risk management, and daily operations.
3. To focus our collective efforts, we issued a circular last week inviting all banks to conduct a strategic business-model review, with boards, senior management, and staff at all levels encouraged to take part.
4. Let me emphasise that this business-model review is intended to go beyond a tick-box exercise. It provides a better understanding of the industry's direction and allows us to support these transformations through practical supervisory guidance.
5. We strongly encourage banks to bring their long-term strategies to life by leveraging our platforms, especially the GenA.I. Sandbox and DLT Incubator. These are the perfect places to safely test-drive new business models.

Competence and compliance

1. Our third topic is the people side: competence and ethical use across the organisation. A.I. and DLT are still sometimes regarded as issues mainly for the IT department. In reality, though, users across the organisation are now expected to work with these technologies in a more informed and future-ready manner.
2. The guiding principle here is ethical use. Applying ethics in practice requires real understanding - solid understanding of how technologies are impacting our processes, from data interpretation and model interaction to final decision-making.
3. This is why we are placing a renewed emphasis on competency development. We're tailoring support specifically for general practitioners across financial institutions, focusing on more advanced use of technology.
4. Our efforts are already underway. Over the past few years, over 3,000 practitioners from both financial and technology sectors have participated in curated knowledge-exchange sessions, like our FiNETech series and specialised training programmes.
5. These sessions do more than just transferring technical knowledge. They generate critical insights on responsible innovation and ethical leadership in the Fintech space.
6. Looking ahead, we are planning to offer more specific support focused on human-machine interaction. For example, we are exploring a chatbot to help general users improve their prompt engineering skills. And we look forward to your participation in "Train-the-Trainer" workshops and other activities.
7. Our goal is to create a workforce that not only uses advanced technologies but does so with the ethical understanding necessary for responsible innovation.

"From Principles to Practices"

1. With all banks "gone" Fintech, the next level of development is guided by the overarching principle of responsible innovation. Our latest Fintech Promotion Blueprint focuses heavily on actionable practices - from developing cybersecurity baseline for Fintech solution providers, to exploring post-quantum cryptography.
2. The Blueprint also includes specific toolkits for responsible A.I. innovation. A prime example is Project Noor - a collaborative effort with the BIS Innovation Hub Hong Kong Centre and like-minded regulators. This initiative aims to enhance explainability of A.I. models, by co-developing a tool to lighten up and manage risks of the A.I. "black box".
3. Responsible innovation remains a key theme as digital transformation accelerates. To achieve this, we must translate principles to practices, and from purposes to outcomes. Winners are those who are fast and cautious, and those who are transformative and collaborative.
4. Finally, I want to bring these topics together under our Fintech Promotion Blueprint - how we turn principles into concrete tools for you. I look forward to further our dialogue and collaboration to make us all winners. Thank you.