The Hong Kong Monetary Authority (HKMA) has released its annual report, reviewing trends and key events in monetary and banking affairs in 2025, and outlining strategic priorities for 2026. These priorities include fintech initiatives, and infrastructure modernization efforts.
Key initiatives this year will drive fintech innovation and digital transformation across the financial sector, with a specific focus on adopting artificial intelligence (AI) and distributed ledger technology (DLT). Concurrently, infrastructure modernization efforts will seek to bolster Hong Kong’s competitiveness as a global financial hub, facilitate cross-border trade, and expand financial access for both businesses and individuals.
The HKMA has also committed to strengthening consumer protection and business resilience against rising cyber threats. This includes the deployment of supervisory technologies to enhance regulatory oversight, anti-money laundering (AML) enforcement, and overall risk management.
Enhancing competitiveness and global connections
In 2026, the HKMA will continue to reinforce the city’s status as a leading international financial center, focusing primarily on expanding Mainland-Hong Kong Connect schemes and improving related ancillary services.
Regionally, the authority said it will collaborate with relevant bodies to enhance the Shenzhen-Hong Kong cross-boundary data validation platform. This will involve expanding data sources, types, and geographical coverage, while improving the overall customer experience and interface.
Launched as pilot in 2024, the Shenzhen-Hong Kong cross-boundary data validation platform is a blockchain-based system that securely verifies documents and data across borders without transferring or storing the original files outside their home jurisdiction, supporting smoother business, government, and financial services collaboration.
The HKMA has also committed to stepping up its engagement with various Middle Eastern and Association of Southeast Asian Nations (ASEAN) economies in 2026. The goal is to deepen collaboration with the central banks and financial industry participants in the two regions, and promote co-operation in areas such as financial infrastructure, fintech development, and market connectivity.
Advancing fintech leadership and SME financing
To reinforce Hong Kong’s position as Asia’s fintech hub, the HKMA will advance initiatives under the four strategic pillars of Fintech 2030, building on the foundation established by Fintech 2025. These pillars encompass data and payments, AI, resilience, and tokenization.
To support businesses and trade, the Cargox Pilot Programme will launch a number of projects designed to advance trade finance digitalization and support financing for SMEs. These projects will leverage the Commercial Data Interchange (CDI) data infrastructure and explore data sharing opportunities with both public and private data sources.
Modernizing payment systems
The HKMA has also committed to enhancing its Faster Payment System (FPS), and said it will explore new use cases in collaboration with the industry and various government departments. These initiatives will focus on enhancing connectivity with other systems and service providers, and facilitating cross-border payments.
AI infrastructure
Furthermore, the HKMA plans to develop shared, scalable AI infrastructure in collaboration with banks, technology firms and other industry stakeholders. The aim here is to reduce barriers to the adoption of AI for the private sector.
Tokenization and digital assets
The HKMA has also committed to fostering innovation in the tokenization ecosystem, launching the Ensemble initiate to advance efforts in supporting real-value transactions involving digital assets and tokenized deposits. Throughout 2026, Ensemble will become operational, with its pilot environment progressively enhanced to support, for example, settlements in tokenized central bank money on a 24/7 basis.
On the stablecoin front, with the Stablecoins Ordinance taking effect on August 01, 2025, the HKMA said it will also focus on implementing the licensing regime for stablecoin issuers. This encompasses processing licenses, supervising licensed issuers, and monitoring the market.
Finally, the HKMA will work on strategically positioning Hong Kong as a global fixed income and currency hub, while promoting innovation in the bond market. In particular, it will assist the government in issuing tokenized bonds, continue to review the current legal framework for tokenized bonds, and explore secondary market use cases for digital bonds.
Ensuring financial stability and system integrity
This year, the HKMA will also prioritize the stable and effective functioning of Hong Kong’s financial system, monitoring developments in the external environment, and remaining vigilant to emerging risks.
To address third-party and cyber risks faced by the banking sector, the HKMA will develop guidance for implementing the Basel Committee on Banking Supervision (Basel Committee)’s new Principles for the sound management of third-party risk in Hong Kong. It will also develop the Cyber Resilience Testing Framework and conduct a pilot run, while exploring deploying the Cyber Mapping Exercise as a risk management utility for both banks and regulators.
Given the growing risks posed by quantum computing, the HKMA will also introduce a blueprint for enhancing the readiness of banks to transition to Post Quantum Cryptography.
Combating money laundering and enhancing consumer protection
To address financial fraud, the HKMA said it will promote bank-to-bank information sharing to address information gaps, and carry out thematic reviews to enhance the identification of money laundering and terrorist financing risks in rapidly evolving areas such as digital assets and payment service providers.
The HKMA will also deliver a program aimed at accelerating the deployment of AI and fraud-prevention technologies to enable monitoring systems to detect and disrupt suspicious activity earlier and faster. It will collaborate with the industry to develop tools for payment data analysis to aid in the detection of money laundering and terrorist financing risks.
In response to rising fraud and scams, the HKMA will continue its anti-scam consumer education efforts, and promote wider adoption of consumer self-protection tools, including Money Safe, a fraud prevention service launched by the HKMA to safeguard banking customers’ deposits.
In parallel, the HKMA will also step up surveillance of fraud and scams, including the illegal use of bank names and unlicensed deposit-taking activities by crypto firms. It will also work with banks to enhance their customer identity authentication capabilities, and pursue discussions with the industry to develop guidance on handling customer losses incurred from scams.
Suptech transformation
To enhance supervisory efficiency and deepen insights, the HKMA will accelerate technology adoption across its end-to-end supervisory processes, spanning prudential supervision, conduct supervision, policy development, anti-money laundering and enforcement. In particular, it will explore the adoption of agentic AI workflows to transform its supervisory reviews and examinations.
The HKMA will also further advance its Data-driven and Technology-empowered Supervision framework by strengthening risk-data capabilities for both supervisors and banks. Specifically, the phased roll-out of the Granular Data Reporting 3.0 roadmap will require banks to submit granular data instead of traditional template-based surveys and returns, thereby enabling more in-depth supervisory insights.
Future-proofing the banking sector
To support banks in exploring more advanced use cases of AI and DLT, as well as smart contract-powered tokenization services, the HKMA will further enhance its Generative AI (GenAI) Sandbox and Supervisory Incubator for DLT.
The authority will also launch a renewed series of promotional initiatives to further advance fintech adoption across the banking sector. These include rolling out Fintech Connect 2.0, organizing additional events under the FiNETech series, and publishing practice guides and research papers focused on fintech-specific risk management and compliance issues.
Featured image: Edited by Fintech News Hong Kong, based on images by creativaimages and bloodua via Magnific
