The Hong Kong Monetary Authority (HKMA) is going all-in on FinTech as it gears up for the territory’s FinTech Week 2023, which takes place from October 30 to November 5. It has published a comprehensive roadmap for the promotion of FinTech over the next 12 months, along with updates on a number of ongoing projects.
The overall push of the roadmap is to secure Hong Kong’s stated aim of becoming a FinTech (and crypto) hub, with five key pillars to support this:
1/ promoting the territory as a FinTech hub
2/ clarifying regulations
3/ improving support infrastructure
4/ nurturing talent
5/ offering financial support
These initiatives feed back into the HKMA’s FinTech 2025 strategy, which was announced back in 2021 and encouraged the ‘comprehensive’ adoption of new technologies by the financial sector, with one directive being “All banks go FinTech”.
The technologies at the forefront of this push are artificial intelligence (AI) and distributed ledger technology (DLT), which had existing adoption rates of around 60% and 30% respectively in a 2022 ‘baseline’ assessment. With the proposed promotional strategy, the adoption of these technologies was projected to rise to around 85% for AI and 65% for DLT by 2025.
The new roadmap also highlights three ‘FinTech verticals’, which should be focused on in the overall expansion of the sector.
These are WealthTech/InvestTech, to deliver personalized and easily accessible investment solutions ‘across the entire wealth curve’, InsureTech, to digitize the insurance industry and offer improved efficiency and outcomes, and GreenTech, to focus on new technologies on the path to becoming a net-zero economy.
To achieve the desired results, the roadmap outlines activities such as establishing a FinTech Knowledge Hub, hosting more showcase events (such as the upcoming FinTech Week), seminars and training sessions, and publishing videos and research reports highlighting use cases and practical considerations.
Deputy Chief Executive of the HKMA, Arthur Yuen, explained the inclusive and holistic nature of the plans to cover the whole financial services industry:
“The overarching approach of the Roadmap revolves around cultivating collaboration. It extends beyond banking, encompassing areas such as insurance, wealth management, and capital markets activities. Through close collaboration with the other financial regulators and on-going engagement with stakeholders, we are committed to building a sustainable and inclusive Fintech ecosystem in Hong Kong.”
The authority also promoted recent successes in the area, such as the on-going e-HKD project, which we Observed back in May when the pilot scheme was launched, and an HK$800 million tokenized green bond issuance back in February.