Hong Kong government pressured to keep up in fintech race
Hong Kong’s government has come under fire for perceived failings in the further development of fintech in the region.
The Financial Services Development Council (FSDC) today (9 May) has released two research reports that look at the fintech scene in Hong Kong and it urges the government to step up the action.
Chairperson of the FSDC, Laura Cha, says the nation “needs to catch up in the race and demonstrate to local and international fintech firms that Hong Kong offers opportunities for developing their businesses”.
According to a Hub Review 2016 issued by Deloitte, the global top five fintech hubs last year were London, Singapore, New York, Silicon Valley, and Hong Kong. In fact, Banking Technology was invited to a fintech tour of Hong Kong in January, and quite a few people at events did feel the nation sits in Singapore’s shadow. So the words from FSDC are echoing these previous sentiments.
In the FSDC report, “The Future of Fintech in Hong Kong”, it says distributed ledger technology (DLT) is one of the major development clusters.
Cha adds that Hong Kong has “only a nascent fintech and DLT sector” and should “develop these technologies on par with its mainstream finance”.
The report also outlines an overall fintech strategy, covering the nature, present status, issues and barriers, as well as concrete recommendations. These recommendations can be grouped under five key areas, namely cybersecurity, payments and securities settlement, digital identity and know your customer (KYC) utility, wealth technology and insurance technology, and regulatory technology.
In its DLT report, FSDC suggests that the government and the financial services industry should use a four-pronged approach which involves establishing a leadership function within government, establishing a hub or focal point for the DLT community, embracing digital currency development, and stepping up the commissioning of DLT-based proofs of concept.
The Hong Kong Special Administrative Region Government established the FSDC in 2013 as an advisory body to promote more development of the region’s financial services industry.