Hong Kong regulators question HSBC over AI hub decision favoring Singapore

Key facts

• Hong Kong's de facto central bank, the HKMA, questioned HSBC about its decision to set up an AI hub in Singapore.
• HSBC plans to hire over 100 AI specialists for the Singapore-based AI centre of excellence.
• The HKMA has also discussed the placement of senior executives in Hong Kong with HSBC and Standard Chartered.
• Regulators are concerned about Hong Kong losing its status as a regional financial hub.
• HSBC already maintains AI personnel in the UK and Hong Kong and is building an AI research institute in Hong Kong.

Hong Kong's de facto central bank, the Hong Kong Monetary Authority (HKMA), has questioned HSBC regarding its decision to establish a new artificial intelligence hub in Singapore, a move that has raised concerns about the city's competitive standing as a regional financial center. The HKMA approached the bank in recent months about its choice of location, according to two people familiar with the exchange.

HSBC announced the "global AI centre of excellence" in July, with plans to hire more than 100 AI specialists to support its wealth management and payments divisions. This initiative is part of a broader restructuring led by chief executive Georges Elhedery, who has focused resources on key markets, with Hong Kong being HSBC's largest.

One person familiar with the matter noted that Hong Kong regulators are sensitive to resources being moved externally and are wary of "no longer [being] the centre or the hub for the region." The Singapore AI center follows Elhedery's $14 billion deal to take full control of Hong Kong's Hang Seng and HSBC's agreement to sell its Singapore insurance business to Allianz for $2.1 billion.

HSBC already has dedicated AI personnel in the UK and Hong Kong and is constructing an AI research institute in Hong Kong. The bank declined to comment on its discussions with the HKMA, stating that senior leaders are based in both London and Hong Kong. Standard Chartered has also relocated executives from Singapore to Hong Kong and declined to comment.

The HKMA's requests for local executive presence are longstanding, aimed at ensuring senior decision-makers from international lenders remain accountable. Preserving Hong Kong's status as an international financial center is one of the HKMA's primary statutory responsibilities.