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Artificial intelligence is projected to enhance pretax earnings for domestic Hong Kong banks by 8-17%, potentially adding up to $1.5 billion annually. This increase is based on estimates from Bloomberg Intelligence and Deloitte research, highlighting significant cost savings and improved loan pricing as key benefits. Major banks like BOCHK, Hang Seng, and BEA are expected to see substantial gains, with HSBC and Standard Chartered potentially experiencing even larger boosts.
The integration of AI tools is already underway, with HSBC utilizing AI for screening billions of transactions monthly. The technology is being applied across various functions, including risk management and customer service, indicating a strong trend towards AI adoption in the banking sector. As banks continue to explore AI applications, the financial services industry anticipates further advancements and efficiencies in the coming years.
• AI could increase Hong Kong banks' pretax earnings by up to 17%.
• HSBC has over 1,000 AI use cases in various banking operations.
Pretax earnings refer to the profit a company makes before tax deductions, which is expected to rise due to AI.
AI use cases are specific applications of AI technology, with HSBC having over 1,000 identified.
Risk management involves identifying and mitigating financial risks, enhanced through AI tools in banking.
HSBC is leveraging AI for transaction screening and various banking operations, showcasing its extensive use of AI.
Standard Chartered is expected to benefit from AI integration, potentially boosting its pretax profits significantly.
South China Morning Post 8month
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