“The second cohort represents a major leap forward in making AI adoption safer and more robust,” said Arthur Yuen Kwok-hang, the authority’s deputy chief executive, in the statement. “The diverse representation of banks in this cohort highlights the industry-wide consensus on AI’s transformative potential.”

He added that combined efforts made by the banks, technology firms and academic institutions represented a testament to the HKMA’s commitment to fostering the local fintech ecosystem.

A defining theme of the 27 use cases in the second cohort was a proactive approach to AI governance, aimed at improving accuracy and consistency at a scalable level, according to the statement.

“In a response to the emerging risk of deepfake-related fraud, the sandbox will also serve as a testing ground for advanced defence mechanisms,” the HKMA said in the statement. “Several participants will conduct adversarial simulations, using AI to stress-test and fortify their systems against sophisticated digital fraud.”