Blockchain and AI Reshaping Smart Finance: What's Next for Hong Kong's Financial Sector

The convergence of blockchain technology and artificial intelligence is fundamentally transforming how financial institutions operate across multiple sectors. During the recent Shenzhen Xiangmilake Financial Summit held on December 20, industry leaders discussed how these technologies are reshaping traditional finance, from banking operations to securities trading, insurance underwriting, and international payment systems.

The Technology Stack Behind Smart Finance

Smart finance relies on a sophisticated integration of multiple technological layers. AI-powered systems now drive backend operations through advanced large language models, while blockchain provides the immutable infrastructure for transaction verification and data integrity. Big data plays a crucial supporting role, feeding insights that enable more accurate decision-making across financial institutions.

However, the hot block chain applications currently gaining traction face real challenges. AI systems can produce hallucinations—generating plausible but inaccurate information—which poses significant risks in financial contexts where precision is non-negotiable. This reality underscores why human oversight remains irreplaceable in risk assessment and strategic decision-making.

Balancing Innovation with Risk Control

Hong Kong’s approach to adopting smart finance demonstrates a pragmatic balance between encouraging innovation and maintaining system stability. Rather than rushing to deploy emerging technologies, the region prioritizes data authenticity verification and robust risk control mechanisms. This measured stance reflects the understanding that blockchain and AI must serve financial stability, not undermine it.

The financial sector is increasingly turning attention to liquidity management and the growing crypto markets, where blockchain’s transparency features are particularly valuable. Regulatory frameworks like the EU Markets in Crypto-Assets Regulation signal that governments worldwide are establishing clearer guardrails for blockchain-based financial activity.

The Road Ahead

As smart finance continues to evolve, the integration of blockchain and AI across banking, securities, insurance, and cross-border payment systems will likely accelerate. Success depends on maintaining the critical human element—judgment, oversight, and ethical decision-making—while leveraging these powerful technologies. Hong Kong’s balanced approach offers a model for other financial centers navigating this transformation.