Fintech in Hong Kong, what’s next?

The 2018 Hong Kong FinTech Week started this Monday on the 29th of October 2018, this year is the third edition of the annual regional FinTech event. This year they claim that it is the world’s first cross-border FinTech event that takes place in both Hong Kong, Asia’s financial centre and Shenzhen, China’s Silicon Valley. The 5-day conference kicked off with a tour at the AMTD Innovation Lab in Central district, Hong Kong. AMTD group collaborated with the Polytechnic University of Hong Kong to launch Hong Kong’s first university-industry collaborated FinTech centre “AMTD FinTech School of PolyU Faculty of Business”. During the tour of the Innovation Lab, featured speakers and panellists from both the Financial service and Academia shared insights on how Hong Kong will position itself in the ever-changing Financial environment, and the future of FinTech in Hong Kong. The panel highlighted the key aspects of the FinTech trend and the position of Hong Kong in the changing Business environment.

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FinTech, short for Finance Technology, has been a hot topic in the past few years as it slowly becomes a major disruptor of the current Financial Service industry. The term Finance Technology is usually used to describe the application of technology in financial services to optimise and automate service delivery in the sector. With smartphone technologies becoming more prominent than ever, the use of technology facilitating customer services and commercial operations seems inevitable. The trend of FinTech is not limited to the business sector either, the frenzied Bitcoin mining and blockchain trading trend in general that has gone viral in the recent years is the best of example how “FinTech” as a term has already turned from being some professional Wallstreet jargon into something teenagers will find on YouTube video titles. This shift in attention also leads to larger implications over the development of FinTech and how FinTech will impact the role of current financial and legal institutions.

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FinTech as a wide technological phenomenon has notably impacted various aspects of both business and customer-oriented markets, such as innovative payment methods, mobile banking, internet banking, crowdfunding, Insurtech and use of AI advisory in investment banking. The government recently introduce and released the Faster Payment Stem (FPS; commonly known as 轉數快in Chinese) which connects traditional banks, electronic payment/ digital wallet operators altogether to facilitate new ways of payment. This attempt made by the government is another sign of increasing attention FinTech is receiving as traditional institutions are now also turning their heads towards the benefits they can harness from technology. Before the introduction of FPS, other financial have also made quite a successful attempt of incorporating technology into traditional banking practices. HSBC’s PayMe accumulated over a million users in less than half a year. All these cases show how Hong Kong is becoming readier for the shift towards FinTech application.

Although the progress made so far seems quite promising for the future of FinTech in Hong Kong, it is not without challenges and obstacles. The influx of new FinTech based financial services means that there will be increasing challenges towards current legal regulations in monitoring economic activities. With recent cases of fraudulent use of e-wallet applications in Hong Kong, people are casting doubts over how intellectual property, consumer protection and financial crime prevention will be upheld in the FinTech era to maintain market integrity.

Indeed, there is already consensus over how FinTech will become increasingly more prominent in Hong Kong. However, there are still many challenges ahead that need to be addressed before Hong Kong can truly harness the full potential of FinTech in the coming years.