Hong Kong regulator’s no phoney for banking plans
The Hong Kong Monetary Authority (HKMA) has unveiled a number of initiatives as it looks to improve the region’s use of payments, APIs and innovation.
In a speech delivered during the Annual Banking Conference of the Hong Kong Institute of Bankers, Norman Chan, chief executive of the HKMA, outlined its grand ambitions.
Chan says: “The upgrading of our banking system to a new and higher level of smart banking is not just something nice-to-have but a must. To meet the rising aspirations and demands of customers, banking and technology must converge sooner rather than later.”
The initiatives include a faster payment system (FPS), an “enhanced” fintech supervisory sandbox (FSS 2.0), promotion of virtual banking, getting in on the API act, and the usual pleasant words about “cross-border collaboration” and “enhanced research and talent development”.
In terms of FPS, both banks and stored value facilities (SVF) operators can participate in this, and it supports the use of mobile phone numbers or email addresses for payments in Hong Kong dollar and Renminbi “anytime and anywhere”.
FPS is scheduled to be launched in September next year. In addition, the HKMA says an industry working group has been established to facilitate a common QR code standard.
FSS 2.0 will have three new features. A supervisory chatroom for feedback to banks and tech firms. Secondly, there will be direct access to the sandbox for firms seeking feedback from the chatroom without necessarily going through a bank.
In addition, the sandboxes of the HKMA, the Securities and Futures Commission and the Insurance Authority will be linked up for a single point of entry for pilot trials of cross-sector fintech products. The FSS 2.0 will be launched by the end of 2017.
Not many details on APIs, but the HKMA says it aims to finalise its policy for the banking sector around the end of 2017. Even less details on virtual banking, so we’ll look out for that later.
For the customary and cosy words on collaboration, the HKMA says latest initiatives being pursued include co-operation with the Office of Financial Development Service of the Shenzhen Municipal Government, and the development of a distributed ledger technology (DLT) platform to digitalise banks’ trade finance processes in Hong Kong, with “potential connectivity” with Singapore’s trade platform.
Finally, the HKMA will step up collaboration with the Hong Kong Applied Science and Technology Research Institute (ASTRI), Science Park and Cyberport. It’s very vague on the matter and just says it will “promote the introduction of new technology and processes”. However, this news does follow on from July, when the HKMA and ASTRI launched their fintech career accelerator scheme to tap into the juicy veins of young blood.
The HKMA says further details of the initiatives will be announced in due course.