China second to US in global AI finance index, with Hong Kong third as city hub

China has emerged as the world’s second most competitive country for artificial intelligence in finance, ranking behind the US but well ahead of the rest of Asia, according to a global index. China scored 83.41 in the Global AI Competitiveness Index, trailing the US at 98.84 and ahead of the UK at 78.26, a report released on Wednesday by think tank Deep Knowledge Group showed. Switzerland ranked fourth, followed by Singapore, Germany, Saudi Arabia and India. The world’s second-largest economy outperformed all countries in financial sector AI maturity, earning a score of 90 for its strong adoption of AI across banking, insurance, fintech and investment management. It also performed well in categories including innovation ecosystem (80), and talent, education, and research and development (76). The index additionally assessed areas such as regulation, infrastructure and data readiness, and capital availability. “China was assessed as the strongest among the top-ranked countries at translating AI capacity into production-grade deployment in financial services – the ‘last mile’ from capability to operational systems,” said Dmitry Kaminskiy, general partner at Deep Knowledge Group. Government support and market demand drove a strong capacity for AI in finance, the report said. China strategically invested in AI-driven financial services, with US$269 billion in total funding directed towards AI start-ups, many of which focused on fintech and blockchain applications, it added. That compared with more than US$310 billion in the US and around US$152 billion in the UK. With 2,065 AI enterprises focused on finance, China’s sector was expanding rapidly, particularly in mobile payments, AI-driven lending such as credit scoring models and digital banking solutions. The country’s advantages were most visible where competitiveness was driven by scale, speed of adoption and end-to-end deployment capability, Kaminskiy said. By contrast, the US led because it combined high performance across all pillars that the index measured, reflecting both scale and institutionalisation, he added. China lagged in infrastructure and data readiness, scoring 62 against the US’ 80 – a sign that its next challenge could lie in strengthening the layers needed to make AI deployment “repeatable and robust at institutional scale”, said Kaminskiy. Its capital availability score of 72, compared with 86 for the US and 80 for the UK, also pointed to limited headroom for growth in funding channels supporting late-stage expansion, cross-border ventures and sustained financing of finance-grade AI systems. “But this is likely to change very quickly, as China’s capital availability is experiencing a significant, policy-driven surge in recent years, particularly in the technology and AI sectors, as evidenced by their recent tech IPO [initial public offering] boom,” said Kaminskiy. The Global AI Competitiveness Index’s fifth edition ranked 20 countries and 15 city-level finance hubs on AI capability and maturity. Previous editions measured enterprise, research innovation, human capital and regulation. The city-hub ranking placed New York and London first and second, with Hong Kong third, based on combined advantages in market connectivity, institutional concentration and capital formation for AI-enabled financial activity. Hong Kong scored high in capital markets, but lower in ecosystem scale and funding intensity, reflecting its smaller and focused profile, according to the report. The city was a scaling and go-to-market hub rather than a broad early-stage experimentation centre, it added. “With the city’s strengths in regulated adoption, cross-border connectivity and institutional financial depth, Hong Kong is uniquely positioned to contribute to the global adoption of AI in financial services,” said King Au King-lun, executive director of the Financial Services Development Council, who unveiled a separate report – “AI for Finance in Hong Kong” – on Wednesday.