Media OutReach
KPMG: Slower than expected interest rate cuts to support bank margins in 2025
Banks should prioritise cost optimisation, data governance, and digital transformation to build a foundation for long-term growth
HONG KONG SAR – Media OutReach Newswire – 24 January 2025 – Hong Kong’s banking sector showed signs of recovery in 2024 after a prolonged period of challenges. This positive trend is expected to continue in 2025, with the pace of US rate cuts expected to be slower than many forecasts.
KPMG’s latest report, the Hong Kong Banking Outlook 2025, predicts substantial opportunities for banks that are willing to adapt and innovate, with technologies like Generative AI and virtual assets set to transform operating models. The report provides insights and predictions from KPMG experts regarding the outlook for Hong Kong and highlights key themes for banks to focus on this year, including embracing emerging technologies, staying abreast of ESG trends and keeping pace with regulatory developments.
Paul McSheaffrey, Senior Banking Partner, Hong Kong, KPMG China, says: “2024 marked an improvement for Hong Kong’s banking sector, with signs of recovery emerging after a prolonged period of challenges. Driven by policy shifts in the Chinese Mainland, these developments have laid the groundwork for cautious optimism entering 2025. Some green shoots of recovery have been seen, including an uptick in funds raised on the Hong Kong Stock Exchange and positive policy measures in the Chinese Mainland aimed at stimulating consumer demand. Thus, we are more optimistic about the prospects of the Hong Kong banking sector during the year.”
For retail and commercial banks, KPMG believes that the pace of interest rate reductions will be slower than many forecasts suggest, which will help banks preserve their margins. For investment banks, the positive policy measures in China are expected to enhance consumer sentiment, thereby fostering capital raising and M&A activity in China, ultimately benefiting Hong Kong.
Jianing Song, Head of Banking and Capital Markets, Hong Kong, KPMG China, says: “As we enter 2025, the environment faced by banks is becoming increasingly complex. However, we believe that this year will bring substantial opportunities for banks willing to adapt and innovate. Emerging technologies, such as Generative AI and virtual assets, have the potential to transform operating models. Through cost optimization, data governance, and digital transformation, banks can navigate their current challenges and build a foundation for long-term growth.”
Resilience remains a key regulatory focus
Resilience against cyber fraud and financial crime will remain a top priority in 2025 as losses experienced by banks and customers continue to make headlines. Meeting regulatory expectations will be crucial, with a strong focus on implementing existing regulations and new resilience requirements. AI adoption will be become a sector-wide topic in financial crime over the next two years, as authorised institutions and regulators gear up to tackle risks and meet regulatory expectations.
KPMG also expects Hong Kong regulators to launch initiatives to further encourage the use of distributed ledger technology (DLT) in the banking industry. This is driven by the need to build resilience against the operational risks associated with traditional settlement and payment infrastructure. It also addresses the need for banks to adapt their business models in the face of competition from new Fintech market entrants and ‘digital natives’.
Strategic cost optimisation
Geopolitical uncertainty, rising operational expenses and increasing regulatory requirements mean that manging costs will remain a focus in the banking sector. Instead of implementing broad cost-cutting measures, KPMG expects banks to adopt a more strategic approach centered on cost optimization. This involves identifying the root causes of inefficiency and implementing targeted corrective interventions. Automation can be an effective tool in this process, addressing latent inefficiency in core processes across front, middle, and back office. This can lead to increased productivity, reduced cost to serve, an enhanced customer experience and ultimately, a stronger top line.
Digital transformation trends
The pace of digital transformation in Hong Kong’s banking sector is expected to accelerate in 2025. More than one-third of financial institutions are already integrating Generative AI, supported by government initiatives such as the HKMA’s Generative AI Sandbox. Virtual assets have also been ranking high on the digital transformation agenda for banks, with initiatives like HKEX’s Virtual Asset Index Series and HKMA’s Project Ensemble Sandbox accelerating Hong Kong’s tokenisation market development. KPMG expects policy support to continue in this area throughout 2025.
In 2025, Hong Kong banks should prioritise digitising their operations by leveraging resources such as Fintech Connect; expanding their digital-savvy workforce through talent acquisition and upskilling; and future-proofing their digital asset and Generative AI readiness by establishing a robust data governance framework.
Hashtag: #KPMG:
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About KPMG China
KPMG China has offices located in 31 cities with over 14,000 partners and staff, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organisation or to one or more member firms collectively.
KPMG firms operate in 142 countries and territories with more than 275,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
In 1992, KPMG became the first international accounting network to be granted a joint venture license in the Chinese Mainland. KPMG was also the first among the Big Four in the Chinese Mainland to convert from a joint venture to a special general partnership, as of 1 August 2012.
Celebrating 80 years in Hong Kong
In 2025, KPMG marks “80 Years of Trust” in Hong Kong. Established in 1945, we were the first international accounting firm to set up operations in the city. Over the past eight decades, we’ve woven ourselves into the fabric of Hong Kong, working closely with the government, regulators, and the business community to help establish Hong Kong as one of the world’s leading business and financial centres. This close collaboration has enabled us to build lasting trust with our clients and the local community – a core value celebrated in our anniversary theme: “80 Years of Trust”.
This year’s forum is an important supporting event of the 18th Cross-Strait Forum. During the event, nine Fujian-Taiwan financial integration projects were signed, with a total value of RMB 9.1 billion. The projects cover a wide range of financial services across areas including cross-strait industrial cooperation, water supply security for public welfare, capacity upgrades for long-established Taiwan-funded enterprises, technology and innovation industries, and modern agriculture. These initiatives continue to unlock the benefits of financial policies, promote shared access to financial resources for Taiwan compatriots and Taiwan-funded enterprises, and inject new momentum into industrial integration between Fujian and Taiwan.
At the forum, the Cross-Strait Wealth and Asset Management Cross-Sector Alliance was officially inaugurated. Supported by Jinyuan Group and jointly proposed by its affiliated financial institutions, the alliance was co-founded by Xiamen International Trust, Jinyuan Uni-President Securities, Yuanxin Yongfeng Fund, Fubon Bank (China), Junlong Life Insurance, and Xiamen Chang Gung Hospital, among others. Centered on serving the wealth management and asset management needs of people on both sides of the Taiwan Strait, the alliance aims to build a one-stop service platform covering asset allocation for Taiwan compatriots and Taiwan-funded enterprises on the mainland, family trusts and wealth succession planning, pension finance, and healthcare protection solutions.
The forum also unveiled a series of innovative financial achievements related to Taiwan. The banking industry’s first group standard dedicated to Taiwan-related financial services on the mainland, the “Specification for Taiwan-Related Financial Services of Banking Financial Institutions,” was officially released. At the same time, the “Bailufen” Taiwan Compatriot Financial Service Platform was introduced, further enhancing financial services for Taiwan compatriots living in Fujian and supporting the development of Taiwan-funded enterprises.
Hashtag: #StraitsFinancialForum
The issuer is solely responsible for the content of this announcement.
Media OutReach
Verdant Rock Receives BBB+ Long-Term Insurer Financial Strength Rating with a Stable Outlook from Fitch Ratings
“The infrastructure and capital markets we are targeting have been systematically underserved over the past decade. Verdant Rock enters this space with an investment grade rating, a strong capital position, the regulatory standing, the technical capability, and the long-term commitment that issuers and their advisers have been unable to find elsewhere.”
— Tolga Uzuner, Co-Founder, Chief Executive Officer, Verdant Rock Limited
The Fitch Ratings report can be accessed here:
Fitch Rates Verdant Rock at ‘BBB+’; Outlook Stable
Verdant Rock’s Class 3B registration can be verified via the BMA’s register of regulated entities (search “Verdant Rock”): https://www.bma.bm/regulated-entities
Notes to editors: For the May 2026 licensing announcement, see https://bernews.com/2026/05/walkers-supports-verdant-rock-licensing/
This announcement is (i) for information only; (ii) not an offer or solicitation to buy or sell any security, insurance product, or financial guarantee; and (iii) not for distribution in any jurisdiction where to do so would be unlawful. Forward-looking statements are not guarantees of future results, and Verdant Rock undertakes no obligation to update them. A credit rating is not a recommendation to buy, sell or hold any security and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency.
Hashtag: #VerdantRock
The issuer is solely responsible for the content of this announcement.
ABOUT VERDANT ROCK
Verdant Rock Limited is a Bermuda-based insurance company, regulated by the Bermuda Monetary Authority, providing Basel III and Solvency II compliant financial guarantees in emerging markets, designed to qualify as eligible credit protection under Basel and major insurance solvency regimes, for the benefit of institutions globally.
Online viewers praised the translation quality, with comments including “The quality of this real-time translation is amazing,” “The translation is incredibly fast,” and “The live speech recognition quality is surprisingly good.” Some viewers assumed the subtitles came from NVIDIA’s official translation team.
The achievement demonstrates how Taiwan’s media industry is adapting to AI-driven transformation. TVBS is positioning itself as a leader in integrating proprietary AI development with real-world broadcast applications. The company completed optimization and deployment of the system in just nine days — a process that traditionally requires months of dedicated training, according to Andy Yang, manager of TVBS AI Future Technology Department.
Yang explained that the biggest challenge in real-time translation lies in balancing “content accuracy” with “reading fluency” under extremely tight time constraints. Huang’s speaking style is highly improvisational and frequently switches between English, Mandarin and Taiwanese, while audience applause and cheering often occur simultaneously.
Applying standard off-the-shelf translation software in such an environment would likely result in sentence segmentation errors and unclear semantic interpretation, Yang said. Rather than pursuing “zero-latency” translation at all costs, TVBS designed a subtitle presentation mechanism specifically tailored to the keynote format.
Prior to the event, the TVBS team conducted extensive cross-platform testing on multiple AI translation models, evaluating latency and error rates. By introducing a carefully calibrated broadcast delay, the system gained additional time to process semantic meaning and contextual alignment. This approach enabled smoother subtitles matching natural Chinese reading habits, Yang said.
The team also built a dedicated knowledge base for NVIDIA GTC Taipei, compiling AI industry terminology, product names and technical keywords in advance. This significantly improved translation quality and the accuracy of professional content delivery. TVBS’s real-time translation system can be customized based on different broadcasting scenarios, Yang noted.
Yang emphasized that the key to the rapid nine-day deployment was cross-department collaboration. Engineering teams handled hardware tuning and signal integration, while internal technical and content teams managed ongoing model training and refinement. TVBS established a collaborative workflow integrating both technology and editorial expertise.
Through continuous iteration and adjustment, the team incorporated Taiwanese linguistic nuances and natural Chinese phrasing into the system. This enhanced fluency and readability beyond what generic AI models alone could achieve, ultimately shaping what Yang called a distinct “TVBS AI style.” The approach reflects the company’s “3T” philosophy — Truth, Trust and Technology.
In his keynote at the Taipei Music Center, Huang focused on AI infrastructure, next-generation computing platforms and NVIDIA’s latest technological roadmap. GTC Taipei 2026 attracted significant international attention as AI continues to reshape global industries. Through its own transformation journey, TVBS hopes to help lead Taiwan’s media industry into a new era shaped by AI.
Hashtag: #TVBS
The issuer is solely responsible for the content of this announcement.
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