Hong Kong: Issued HKMA Circular on consumer protection on the use of generative AI

On 19 August 2024 the Hong Kong Monetary Authority (HKMA) issued a circular with guiding principles for consumer protection with respect to the use of generative Artificial Intelligence (GenAI) in customer-facing applications. The circular builds on the “Consumer Protection in respect of Use of Big Data Analytics and Artificial Intelligence by Authorized Institutions” of 5 November 2019 (2019 BDAI Guiding Principles) and sets out additional principles to ensure appropriate safeguards for consumer protection regarding the use of GenAI in customer-facing applications. In particular, the new principles address governance and accountability, fairness, transparency and disclosure, and data privacy and protection. Notably, the principles require for model-generated outputs to not lead to unfair bias or disadvantage against customers, provide customers with opt-out option of using GenAI, implement proper validation of the GenAI models, among others.