FINTECH MANPOWER DEVELOPMENT IN ASIA-PACIFIC FINANCIAL CENTERS WITH A FOCUS ON ARTIFICIAL INTELLIGENCE AND BIG DATA PROFESSIONALS

5 4 Executive Summary EXECUTIVE SUMMARY Acknowledgments ACKNOWLEDGMENTS We would like to express our gratitude to the Policy Innovation and Coordination Office (PICO) for supporting our research project, “The Development of Fintech, Insurtech, and Regtech Manpower to Sustain Hong Kong as a Leading Global Financial Center”. This Report benefits significantly from the discussions and inputs from major stakeholders of the finance industry including government offices, regulators, financial institutions, professional associations and education providers. Special thanks go to the Hong Kong Institute for Monetary and Financial Research of the Hong Kong Monetary Authority which offer valuable feedback to the initial draft of the Report. The research support provided by Winne CHAN, Ka Chun NG, Ka Chau WONG, Wai Nok YIM, Lionel MOK, and Athar MANSOOR and the editorial assistance of John POON and Christy YEUNG are very much appreciated. The Report also benefits from the services provided by LinkedIn to support our cross-city comparisons. By studying what measures financial centers in the region take to close the talent gap, we hope that the Report can offer some insights into what the region needs to hone the necessary talent for AI and big data. Artificial Intelligence (AI) and big data continue to shape the future of finance. COVID-19 drastically elevates the importance of the digital economy in driving Hong Kong’s social and economic development/recovery. Public and private sector entities quickly adopt digital, remote working practices and protocols to maintain competitiveness under the new normal. Parallel to the rise of big data, cloud computing and blockchain technologies, the centrality of AI to the likelihood of success within Hong Kong’s financial services sector is now beyond dispute. The lack of AI talent is currently presenting a critical barrier to developing financial strategies and capacities in Hong Kong which are fit for the future. Securing Hong Kong’s position as a global financial center requires an immediate assessment of the gaps within the city’s AI and big data talent pool. Simply put, we need to understand why and how Hong Kong can develop its AI and big data talent pool to remain relevant in an increasingly automated and algorithmic, post-Covid world. This Report investigates the landscape for AI and big data talent in Hong Kong and the wider Asia Pacific region, to shed light on labor trends and dynamics, and to identify strategies which can enable Hong Kong to develop a competitive pool of AI and big data talent. This Report is divided into three major sections. The first section presents a macro overview of trends and policies shaping AI and big data talent development in Hong Kong, Singapore, Shanghai, Shenzhen, Tokyo, Sydney. The subsequent section reviews the characteristics of AI/ big data talent manpower ecosystem and flows between those cities by analyzing LinkedIn profile data. Drawing on these two components, the third section provides policy recommendations that can plug fill gaps in Hong Kong’s talent pool. Among the six cities examined in this study, Hong Kong has experienced noticeable outflow of talent during the period studied. With eight universities offering undergraduate degrees in the fields of data science, data analytics and artificial intelligence, Hong Kong is helping to meet the AI and big data needs of financial institutions. Hong Kong’s status as an exporter of AI and big data talent suggests that our talent development pipeline/environment is generally recognized throughout the region. However, this situation also presents a potential threat to the competitiveness of Hong Kong’s financial sector where the AI/big data skill gap is expected to widen as more entities/institutions seek to develop their own algorithmic capacity. There is an urgent need to support the labor economics of AI and big data talent. Our policy recommendations point to expanding the supply of training programs in both universities and industry settings, whilst making Hong Kong a more attractive location for AI developers to develop longer- term careers. Simultaneously, the government can ease the flow of talent to meet growing demand by supporting co-operation between local universities and the financial sector so graduates and professionals can, and are incentivized to continue developing their careers in Hong Kong. The infrastructure surrounding AI and big data in the financial sector is expected to scale rapidly. The window of opportunity for Hong Kong to establish its standing as a future-proof financial center is closing. Now is the time to develop a comprehensive strategy for Hong Kong’s finance industry to navigate an increasingly digital world.