eddie yue : opportunities and challenges of emerging technologies in the financial ecosystem welcoming remarks by mr eddie yue, chief executive of the hong kong monetary authority, at the hkma - bank for international settlements ( bis ) joint conference " opportunities and challenges of emerging technologies in the financial ecosystem ", hong kong, 31 october 2024. * * * distinguished guests, ladies and gentlemen, good morning! it is a great pleasure to welcome you all to this conference, organised jointly by the bis and the hkma. in particular, a big welcome to those who have travelled all the way to hong kong for this event. this year, we are especially honoured to have the global association of risk professionals as our supporting organisation. when the conference was first held in march last year, the banking crisis in the us and europe was just unfolding. and these incidents raised concerns about banks'risk management in a rapidly tightening interest rate environment. they also reminded us how technology that is meant to provide convenience to customers could also bring challenges to banks. when digital banking enables depositors to withdraw millions of dollars with a single click, banks and regulators are often left with little time to react. now, a year and a half later, the role of technology has only become more important. technological advancements are reshaping our world at an astonishing pace. among a wide array of cutting - edge technologies, artificial intelligence ( ai ) has drawn immense attention from the industry given its great potential to transform the financial system. as a regulator, our instinct is to be prudent ; however, as a facilitator, we are mindful that rapid advances in technologies can open up new opportunities for the financial industry. the key question is – how can we facilitate the industry to adopt novel technologies while at the same time managing new risks to the financial system brought by these changes? are we fully prepared for these challenges? these are the very themes we will be discussing in today's conference. let me spend a few minutes to share with you the hkma's philosophy and approach towards the adoption of ai, especially generative ai ( genai ), in financial services. i will also share some insights on where and how the banks should stay alert. nowadays, banks are deploying ai in many different areas to enhance operational efficiency and improve customer experience. we have seen ai applications in customerfacing functions, such as remote account onboarding and customer chatbots. we have also seen the use of ai in middle and back

economy to equilibrium and of inflation to target, in the medium - term horizon. in our view, the indicators of economic activity and inflation are performing in the right direction ; however, the sustainable accomplishment of targets will need time and will imply keeping low interest rates for some quarters ahead. overall, the main indicators in banking system activity improved. liquidity, profitability and capitalisation indicators are at good levels, while the ratio of non - performing loans has trended down. the bank of albania has continued to work for the regulation and prudent supervision of the banking system, pursuant to the legal obligations, as well as to sustain its steady development. also, we have cooperated with : ( i ) other public agencies, to improve the legal framework, align regulatory practices, and identify measures for withstanding systemic shocks ; ( ii ) international financial institutions, to develop loan restructuring programmes ; and, bis central bankers ’ speeches ( iii ) foreign regulatory institutions and parent banking groups operating in albania, to exchange information. i would like to reiterate that the banking system is solid, liquid and well capitalised for conducting its intermediary function. however, credit growth continues to appear sluggish, due to tight bank lending policies. maintaining and strengthening banking system soundness is to everyone ’ s benefit, as this is the only system that, with its funds, may sustain long - term economic growth. lending is expected to improve slightly during 2015. the bank of albania, however, expects an increasingly active role of the banking system in lending and will also take all the needed measures to encourage it. at the conclusion of discussions, the bank of albania shares the view that economic policies are performing overall in the right direction. in compliance with its legal duties, and pursuant to its institutional commitments in the framework of the arrangement, the bank of albania will continue to work on : • maintaining price stability, in accordance with its 3. 0 % inflation target. the bank of albania will continue to implement its monetary policy in accordance with the targeted inflation regime and free - floating exchange rate regime. the monetary policy will remain on the easing side, aiming at enhancing transparency of communication and its effectiveness. • maintaining adequate foreign currency reserves. • supporting banking system stability, by exercising its duties as the regulator and supervisor of the banking system. special attention, in this regard, will be given to addressing factors determining non - performing loans. for this purpose, the bank of albania will cooperate with the banking industry and other national authorities