The central bank of Hong Kong has said artificial intelligence (AI) will redefine financial services in the city, and urges commercial banks to ready themselves for the impending AI revolution.

In its recent guidance, the Hong Kong Monetary Authority (HKMA) addressed manpower management in the era of AI, recognising the technology's integration into the state’s banking industry.

Banks are utilising AI to deliver personalised services to clients and to analyse vast volumes of data for fraud detection purposes, Coin Geek reports.

While welcoming these advancements, the regulator stressed that banks must carefully consider the impact of AI on their workforce.

The HKMA believes that technological disruptions are not new to banking. Drawing a parallel to the introduction of ATMs in the 1980s, which led to a transition from cash handling to client relationship management roles and ultimately improved the industry, they argue that AI has the potential for a similar positive impact if managed correctly.

Furthermore, AI-related job displacements extend beyond banking and finance. In January, the World Economic Forum estimated that the technology could replace 85 million jobs within the next two years. 

Additionally, Goldman Sachs forecast AI could ultimately result in the loss of 300 million jobs.

To address these disruptions, the HKMA urged banks in Hong Kong to prepare their workforce by providing retraining and upskilling opportunities tailored for the AI era.

“The key is enhancing the professional knowledge and skill sets of employees, enabling them to complement and co-exist with technology in the AI era. By effectively utilising innovative technology, banks can also enhance customer experience. This will create a ‘triple-win’ outcome for bank staff, customers and the banks themselves,” the HKMA said.

Indeed, the regulator has committed to conducting comprehensive research on AI's implications for banking and the anticipated skills gap, aiming to ensure that the city-state remains competitive with other financial centres.