Of the 300 brokerages surveyed early this year, 81% said they did not plan to introduce a chatbot, whereas only 8% said they used one.
Whereas banks in Hong Kong embrace new AI-based technologies, small and medium-sized brokerages shun chatbots, a survey conducted earlier this year by the Hong Kong Securities Association has shown.
The data, quoted by the South China Morning Post, indicates that Hong Kong brokers prefer to use popular messaging apps such as WhatsAapp and WeChat to connect with their clients, whereas as artificial intelligence powered chatbots are being deployed by large financial institutions, like Standard Chartered.
Many small and medium-sized brokerages, which account for the bulk of Hong Kong’s licensed securities dealers, have no plans of using the technology, the survey shows. Of the 300 brokerages surveyed in January and February, 81% said they did not intend to deploy a chatbot, while 8% said they use one.
The reasons for this reluctance are various but expenses are high on the list. Among those brokerages that do not plan to deploy chatbots, 67% said the reason for staying away from chatbots was the excessive cost. For 28% of these reluctant companies the reason for shunning AI-based chatbots was the belief that human agents could not be replaced by machines. Possible legal issues also featured among the reasons.
Brokers seem to be more enthusiastic about social apps. The survey showed 65% of brokers use either WeChat or WhatsApp to communicate with customers, whereas 27% use Facebook.
The Securities and Futures Commission (SFC), however, does not seem supportive as to the use of social apps’ use by brokerages. In fact, some recent enforcement action taken by the regulator concerned the use of such apps by brokerages’ staff. For instance, in October last year, The SFC announces that it has prohibited Mr Xu Tao, a former investment consultant of China International Capital Corporation Hong Kong Securities Limited (CICC), from re-entering the industry for four months. The penalty is imposed over findings that Xu used his mobile phone and WeChat messaging application to accept order instructions from 13 clients between February and August 2015, in violation of the SFC’s Code of Conduct and the internal policies and procedures of CICC.
Mobile apps appear to be growing in popularity along with growing mobile devices use. Thus, Hong Kong-focused retail Forex broker KVB Kunlun Financial Group Ltd (HKG:6877) has revised its agreement with Banclogix to include the development of a mobile trading application for KVB and to upgrade the SAP system for broker. Given the consistent increase of number of mobile internet users in the PRC, KVB Directors are of the view that the mobile trading application will enable the broker to tap into the potential of the fast growing market of the mobile investment market in the PRC and capture the opportunities arising from the growing trend of mobile internet users.