HK launches GenAI Sandbox++ initiative for financial innovation

Hong Kong's regulators have launched the Generative Artificial Intelligence Sandbox++ initiative to promote AI innovation in the financial services sector.

The participating regulators include the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC), the Insurance Authority (IA), and the Mandatory Provident Fund Schemes Authority (MPFA), in collaboration with the Hong Kong Cyberport Management Company.

Building on the success of the GenAI Sandbox initiative launched in 2024, the regulators have jointly expanded the GenAI Sandbox++ to cover multiple financial sectors, including banking, securities and capital markets, asset and wealth management, insurance, mandatory provident fund (MPF) and stored value facilities.

By fostering collaboration among regulators, financial institutions, and technology firms, the initiative aims to spark new ideas and cultivate deeper cross-sector and cross-boundary partnerships.

The initiative maintains its focus on three high-impact areas — risk management, anti-fraud, and customer experience — while continuing to advance “AI vs. AI” strategies by leveraging AI to manage the risks associated with AI adoption. Participating financial institutions will receive targeted supervisory guidance, technical support, and complimentary access to graphics processing unit (GPU) computing resources at Cyberport’s AI.

Supercomputing Centre, enabling them to develop, pilot, and refine their use cases in a risk-controlled environment, thereby accelerating responsible AI adoption across Hong Kong’s financial ecosystem.

The initiative encourages the development of both sector-specific and cross-sector AI applications, including AI-driven insurance underwriting and claims processing, suitability requirements compliance assessment during investment products distribution, AI-powered tools for handling MPF and industry-wide use cases such as intelligent customer chatbots and advanced fraud detection systems.

Eddie Yue, chief executive of the HKMA,said: “The launch of the GenA.I. Sandbox++ marks a significant milestone under our ‘Fintech 2030’ strategy, reinforcing our commitment to building a vibrant ecosystem for responsible innovation. By bringing together regulators, financial institutions, and the tech community, we aim to unlock A.I.’s full potential to drive growth, efficiency, and customer-centricity across financial services, further strengthening Hong Kong’s competitiveness as a leading international financial centre.”

Julia Leung, chief executive officer of the SFC, said, “Expanding the GenA.I. Sandbox to broader capital market participants is a true testament to our collective resolve to drive responsible market innovation and a tech-enabled and future-proof financial market. We encourage licensed corporations to actively participate in this Sandbox to harness the boundless potential of A.I. in enhancing operational efficiency, bolstering resilience and unlocking growth.”

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In fact, the second sandbox cohort focused on "AI vs. AI" strategies is also mentioned in Budget 2026, announced by Hong Kong’s finance chief, Paul Chan, in February. The government is also aligning with the National AI+ Initiative to promote "industries for AI" and "AI for industries (AI產業化、產業AI化)." The Hong Kong Artificial Intelligence Research and Development Institute Company (香港人工智能研發院) will begin operations in the second half of this year to drive AI+ development, commercialise R&D outcomes, and advise on governance and regulatory matters.

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