PRESS RELEASE - The Digitalisation Revolution: Transforming the Future of the MPF Industry"
25 September 2024
The Pension Schemes Association and Ernst & Young Collaborate on Groundbreaking Thought Leadership Paper: "The Digitalisation Revolution: Transforming the Future of the MPF Industry"
Hong Kong – The Pension Schemes Association (PSA) today announces the release of a new thought leadership paper titled "The Digitalisation Revolution: Transforming the Future of the MPF Industry." This report, developed in collaboration with Ernst & Young Advisory Services Limited (EY), explores the transformative role of digital technologies, particularly artificial intelligence (AI), in reshaping the Mandatory Provident Fund (MPF) landscape and enhancing retirement planning for Hong Kong citizens.
Since the MPF’s inception in 2000, it has played a pivotal role in enhancing the financial security and well-being of Hong Kong’s citizens. While significant progress has been made, the PSA's latest publication identifies a growing demand for more information, education (including financial guidance and advice), and personalisation in MPF services. The report offers forward-looking insights into how AI and other digital technologies can help bridge these gaps and meet the evolving needs of members.
Key Findings of the Paper:
- The Need for Change: A considerable portion of Hong Kong’s population remains financially underprepared for retirement. This could lead to a shortfall in desired living standards during retirement, emphasising the need for comprehensive and proactive solutions. The paper advocates for enhanced member education and the adoption of self-service tools to empower individuals to take greater control of their retirement futures.
- AI’s Role in Addressing Market Challenges: The report highlights how AI, including large language models (LLMs), can provide innovative solutions across various areas such as investment advisory, compliance, customer engagement, and operational efficiency. AI-powered tools are projected to improve member satisfaction, reduce costs, and strengthen governance in the MPF sector.
- AI-Powered Robo-Advisory for Personalised Planning: Robo-advisory, already a well-established tool in wealth management, is gaining traction in the MPF space. It offers automated portfolio management and tailored investment strategies, delivering personalised retirement planning for MPF members. The report outlines how this trend is growing in Hong Kong and beyond.
While the report acknowledges certain risks and challenges associated with AI implementation, it ultimately concludes that the future of AI in the MPF industry is promising. There are significant opportunities for industry participants and members to benefit from a more digital, efficient, and personalised approach to retirement planning.
About the Pension Schemes Association (PSA):
The PSA is the most prominent MPF sponsor association in the industry, acting as a bridge among stakeholders to ensure that Hong Kong’s MPF system meets both public and industry needs. The PSA also serves as a consultative body, liaising with policymakers and regulatory bodies on matters related to the development of the MPF system.
About Ernst & Young Advisory Services Limited (EY):
EY exists to build a better working world, creating long-term value for clients, people, and society, and fostering trust in capital markets. Enabled by data and technology, EY teams in over 150 countries provide assurance and help clients grow, transform, and operate. Working across assurance, consulting, law, strategy, tax, and transactions, EY teams ask better questions to deliver new answers for the world’s most complex issues.
This press release is issued by Pension Schemes Association (PSA). For enquiries, please contact the PSA Secretary at admin@pensionschemes.org