MR CHAN KIN-POR (in Cantonese): Deputy President, the development of financial technologies (“Fintech”) in Hong Kong has been relatively slow in the past. However, in the recent two years, thanks to vigorous promotion by various sectors, Fintech has seen rapid development in a wide range of areas, including big data, blockchain, mobile payment, cyber security, artificial intelligence (“AI”), programme trading, etc. At present, 500 Fintech companies have already established their bases in Hong Kong, with amounts of investment far exceeding those of our competitor Singapore, bearing testimony to Hong Kong’s extremely high potential for Fintech development.
In the past, Hong Kong had developed quite a few industries, which had all fizzled out despite having a strong start. However, I have full confidence in our Fintech development. As an international financial centre, Hong Kong itself is an extremely fertile ground for developing Fintech. Given the support of the Government, members of the financial industry can definitely use Fintech to further develop and strengthen Hong Kong’s financial industry, which will be expected to become a new growth area of the Hong Kong economy and significantly raise our competitiveness. Such developments will be very good news to Hong Kong. However, as far as practitioners of the financial industry are concerned, this may not be something which they can take delight in.
In fact, Fintech development represents a restructuring of the financial industry. As Fintech continues to grow, the restructuring of the industry will become faster. By then, there will be a sea change in the operation mode of the industry. Fewer workers will be needed for certain job types, which will even face extinction. Therefore, one main part of the amendment I have proposed is to urge the Government to offer retraining courses for financial industry practitioners to enable them to adapt to new developments in Fintech.
I am not scaremongering. Recently, renowned AI expert LEE Kai-fu said in the interview with the United States current affairs program 60 Minutes that about 40% of jobs will be replaced by AI in 15 to 20 years. According to LEE Kai-fu, AI would definitely turn the world upside down by ushering in unprecedented economic imbalance and even changing the global landscape of power, which would inevitably create an impact on employment.
Europe and America have already started to develop Fintech a few years ago. Quite a number of their analysts have suggested that many frontline jobs in the financial industry may be displaced due to Fintech development. For example, comprehensive online selling or electronic trading services can be directly delivered to customers, replacing a large number of frontline salespersons; the electronic platform services provided by various financial institutions, such as the “e-MPF” centralized electronic platform which is being developed, will also displace a large number of clerical staff. Some experts have even speculated that computer-based financial consultants, which are being developed, will also replace human financial consultants. In the future financial industry, customers will directly communicate with computers for a great amount of services which are currently provided by humans. Of course, this problem will not be confined to the financial industry. In various sectors and industries, AI will also result in loss of jobs which will become the problem facing the community in the future.
A few years ago, while urging the Government to develop Fintech, I have also stressed the need to take into account the job security of financial industry practitioners. That said, we still need not be overly pessimistic. Despite the loss of frontline positions, the change in the operation mode of the industry will
A few years ago, while urging the Government to develop Fintech, I have also stressed the need to take into account the job security of financial industry practitioners. That said, we still need not be overly pessimistic. Despite the loss of frontline positions, the change in the operation mode of the industry will still create more new job positions. Meanwhile, as the financial industry continues to grow, we will need more professional logistic support services. Take the insurance industry as an example. While developing international insurance businesses, we will need more professionals to deal with claims management, underwriting and risk management, meaning more positions will be created. Therefore, I hope that the Government will further study the changes in the manpower demands and job positions of the financial industry in the next 10 years and formulate retraining programmes to assist capable employees in shifting to new positions in other financial sectors. For those employees who cannot adapt to the new development, the Government should also assist them in switching to other industries instead of leaving them victimized by technological development.
Deputy President, the insurance industry is also actively developing Fintech. Various insurance companies are making efforts to introduce the application of Fintech in different areas, such as sales, underwriting, claims management, customer services, etc. While such efforts are currently at an early stage, I believe that concrete results will be seen in the near future. In addition, I would also like to talk briefly about the development of the insurance industry as a whole, including some work relating to the use of technology to protect consumers. The Hong Kong Federation of Insurers (“HKFI”) has recently launched the Motor Insurance DLT-based Authentication System (“MIDAS”), under which blockchain technology is used to authenticate insurance policies. In the past, some unscrupulous intermediaries sold fake insurance policies at the expense of car owners. I believe that a great majority of insurance companies will join MIDAS in the future, and specific QR Codes will be printed on insurance policies. When members of the public go to the Transport Department to register a transfer of ownership, they can authenticate insurance policy by using QR Code in real time in order to avoid being deceived.
In addition, HKFI has also introduced the Insurance Fraud Prevention Claims Database (“IFPCD”) to apply the most advanced AI application in testing and preventing frauds. Insurance frauds have all along been very rampant around the world, resulting in huge losses to the sector and consumers; and it is estimated that the United States is suffering from an annual loss of US$80 billion. While relevant statistics are not available for Hong Kong, it is estimated that frauds here also involve a significant amount. We must understand that insurance companies are only managers of premiums. The insurance payments lost to fraudsters are in fact the premiums paid by the insured. In the end, the losers are not only the insurance industry but also policyholders in the community. Therefore, it is necessary to crack down on insurance frauds. IFPCD has adopted advanced AI to assist insurance companies in expeditiously handling claims and detecting insurance frauds. AI algorithms are used to analyse information on frauds and claims in order to identify suspected and abnormal cases. The insurance companies concerned will then be reminded to conduct further investigations to verify the legality of claims before taking appropriate actions. IFPCD will cover car, medical and personal accident insurances at the first stage, and will be extended to other types of insurance such as life and travel insurances. At present, the same AI technology has been adopted by such places as Singapore and France.
In addition, HKFI is actively promoting the Greater Bay Area Health Insurance Connect scheme which seeks to assist insurance companies in selling medical insurance products to residents of the Greater Bay Area through a comprehensive online platform. However, this proposal is still awaiting approval by the Mainland authorities; I believe that we have to wait for the right timing. In my view, the development of the Greater Bay Area will be an important direction for the industry in the future; and Fintech will also be an important tool for opening up the Greater Bay Area market.
While the insurance industry will continue to promote Fintech development, it also hopes to get support from the Government. In particular, the afore-mentioned projects on protecting consumer rights and interests and promoting the overall development of the industry require additional government assistance and support. In addition, quite a number of small and medium enterprises in the industry have encountered difficulties in applying Fintech, such as the problem with resources; they need government assistance more than the others. Hence, I hope that in promoting Fintech development, the Government should not only formulate policies, but also take the initiative to help the industry remove obstacles in applying Fintech.
I so submit.