03 Jul Hong Kong reinvents itself as global and regional Fintech hub
Ahead of its 20th anniversary as a part of China, Hong Kong remains fourth leading global financial centre. The growing Fintech ecosystem has brought the new opportunities to the financial services industry, after the city lost its third position to Singapore in 2015.
Hong Kong has currently 104 Fintech startups, 37 industry investors and accelerators, and 6 Fintech associations, according to the recent Hong Kong Fintech Startup Report 2017 by Fintechnews.hk. Most of these startups work in wealthtech (23), mobile payments (16) and blockchain technology (16).
However, to leverage the trend, the city should take more proactive steps, says another report by Hong Kong Financial Services Development Council (FSDC). The government has been supportive to Fintech by launching several initiatives in 2016-2017, such as a new HK$2 billion Innovation and Technology Venture Fund to help bridge the funding gap for technology startups. Hong Kong Monetary Authority (HKMA) and the Hong Kong Applied Science and Technology Research Institute launched The Fintech Innovation Lab and the Fintech Career Accelerator Scheme to nurture talents and future industry leaders.
“From a long-term developmental standpoint, Hong Kong is very strong in ‘fin’ but not strong in ‘tech.’ And there is competition as other centers move rapidly ahead with their own Fintech initiatives,” says the FSDC report in reference to the growing influence of Singapore, where the government also provides full support to the industry.
Singapore is a gateway to Southeast Asia and is seen as a wealth management hub, but Hong Kong boasts easy access to China’s trade and capital flows, and has held the title of top global IPO market for two consecutive years, argues CNBC reporter, Rohini Samtani.
The Belt and Road initiative is becoming another reason to pick Hong Kong over Singapore. Standard Chartered is “now looking at Hong Kong as a gateway to markets beyond China — through Beijing’s “One Belt, One Road” plan to connect markets along the ancient Silk Road”, said Anna Marrs, CEO of Standard Chartered for ASEAN and South Asia. Making B2B payments faster and easier is a growing demand from the governments and companies engaged in trade and services with China. CM CrossPay is a pioneer in responding this demand through its cross-border payment and FX settlement channel (link to sign up).
The FSDC report proposes Hong Kong to build a Fintech Strategy around five areas and focus on them. These are cybersecurity, payments and securities settlement, digital ID and Know-Your-Customer (KYC) utilities, wealthtech and insurtech, and regtech.