When it comes to financial technology, Hong Kong is the epicenter of innovation and creativity. Here, startups find fertile ground in a region rich with talent, including a large pool of highly educated and well-skilled engineers with deep technical experience. These individuals are intimately familiar with the unique challenges to growing a fintech or blockchain-driven business, and they know that the best way to succeed is to leverage Hong Kong’s leading-edge financial technology ecosystem.
Hong Kong has identified a key role for fintech in the city’s development, with the government outlining a strategy in its Financial Technology Development Plan (FTDP) to boost the sector’s performance. Speaking at the FTDP launch, Kwan Wing-Sang, financial secretary, said the plan seeks to promote Hong Kong as a world-class fintech hub.
Hong Kong’s Financial Services and Treasury Bureau (FSB) issued a report yesterday outlining its plans for the fintech sector in the next ten years. The paper, titled “Fintech 2025: The Hong Kong Fintech Blueprint,” calls for a “technologically advanced and creative economy” that uses fintech for economic development.The Hong Kong Monetary Authority (HKMA) plans to guide local banks to fully embrace fintech as part of a new strategy. The region’s central bank also stressed that it is going on the offensive with the digitization of its own supervision of financial institutions.
Hong Kong’s central bank supports the development of fintechs
Hong Kong’s monetary regulator has unveiled its new strategy to promote the development of fintechs in China’s special administrative region. As part of this strategy, the HKMA aims to fully adopt new financial technologies over the next four years. The Central Bank also aims to promote fair and efficient financial services for the benefit of Hong Kong’s citizens and economy. At a seminar organised by the Hong Kong Banking Association, Eddie Yue, chief executive of the HKMA, outlined five key areas of Fintech 2025. The regulator aims to encourage all banks to embrace fintech, secure Hong Kong’s future for CBDCs, build a next-generation data infrastructure, increase the fintech-savvy workforce and develop the ecosystem through funding and policy. One of the key areas where monetary authorities want to step up their efforts is in the full digitisation of the banking sector. Building on the achievements of its strategy for the era of smart banking announced in 2017, the HKMA will continue to promote the large-scale adoption of fintechs by banks in Hong Kong. The regulator will identify the specific areas of fintech where the sector is lagging behind and needs support. This also applies to our own regulatory framework: The HKMA will issue new supervisory guidelines to facilitate the adoption of new technologies and continue to lead the way in digitizing banking supervision with advanced technologies.
HKMA will work with stakeholders to implement the Fintech 2025 strategy
The new strategy includes strengthening and expanding the city’s existing data infrastructure. The Hong Kong Monetary Authority plans to set up a credit data exchange platform based on distributed ledger technology (DLT) and to establish a trade data exchange. The central bank will work to increase fintech talent through new training programs and industry-academia collaboration. One such initiative is the Industry Project Masters Network, a program that offers graduate students internships to participate in fintech projects at member banks. The program begins in September. The HKMA said it would engage industry participants to establish a new inter-agency fintech coordination group to formulate policies to support the fintech ecosystem. Together with the region’s Innovation and Technology Commission, the Monetary Authority will expand its fintech monitoring sandbox and provide funding to qualified fintech projects. Eddie Yue, CEO of the HKMA, noted: Fintech is undoubtedly a key growth driver for the financial industry in the post-pandemic era, and it’s time to redouble our efforts to seize the opportunities. The Fintech 2025 document sets out our vision in this area. I encourage all concerned to contact the HKMA. The financial watchdog plans to focus some of its efforts on improving Hong Kong’s preparation for the central bank’s digital currency issuance. The HKMA is not only interested in the development of CBDCs at the wholesale level, but also in digital retail currencies. The financial institution will continue to support the People’s Bank of China in testing the digital yuan (e-CNY) for cross-border payments and will launch a separate study on the Hong Kong digital dollar (e-HKD). Do you think Hong Kong will become a global fintech hub? Let us know your comments in the section below.
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Banking institution, banks, central bank, China, data infrastructure, Hong Kong digital dollar, digital yuan, DLT, e-CNY, e-HKD, financial institutions, fintech, Fintech 2025, HKMA, Hong Kong, monetary authorities, strategy&, technology Photo credit: Shutterstock, Pixabay, Wiki CommonsHong Kong has designated the year 2025 as its target for the development of a major entrepreneurial sector in the country, which will be led by the city’s leaders and supported by a major business ecosystem. The goal of this new initiative is to expand Hong Kong’s role as a global financial hub, a top fintech ecosystem, and the world’s most active innovation center, according to the city’s Financial Secretary Paul Chan.. Read more about regtech hong kong and let us know what you think.
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