An overview of the Fintech Industry in Hong Kong
Hong Kong is one of the major fintech hubs in the world. It is a free economy with low taxation and a stable legal system. As one of the 11 cities and special administrative regions of the Greater Bay Area (GBA) in Southern China, Hong Kong has an advantageous geographical position with high connectivity between East and West. The Hong Kong government collaborates often with private companies to support the fintech development. Hong Kong is positioned to be a launch pad into the largest consumer market in the world, well supported by public and private sectors.
Financial Technology (Fintech) is a modern financial technology to automate the delivery and use of financial services. Fintech assists businesses to improve the management of their commercial operations, using unique software and algorithms in computers and smartphones. Today, fintech is applied in a variety of sectors such as education, nonprofit organizations, retail banking, managing investment, cryptocurrencies, bitcoin etc. Fintech describes a variety of financial activities like smartphone check deposits, international money transfers and investment management. It also integrates different technologies to improve the delivery of financial services to consumers.
The financial sector contributes to 18% of Hong Kong’s GDP. The financial industry employs 220,000 people, equal to approximately 6% of the city’s workforce. Many financial institutions are exploring the help of fintech in their transactions as they are aware of the potential of this new technology. One of Hong Kong’s first and biggest fintech projects was the Octopus card, a reusable contactless stored value smart card for making electronic payments in online or offline systems in Hong Kong. In 2016, the government appointed a steering group to further promote fintech. They hold events and competitions annually, encourage the younger generation to consider fintech and distribute information abroad on Hong Kong’s visa policy to attract fintech companies to come to Hong Kong.
The Fintech Association of Hong Kong is an independent and non-profit association. Its members are comprised of local and foreign companies who are interested in financial technology. Committees are formed by individuals who work in sectors such as Blockchain, Payments, Regtech, Artificial Intelligence, Big Data, Financial Literacy etc. Up to now, the Fintech Association has grown to 1200+ members representing over 300 firms including large banks, insurers, law firms, technology companies and universities. The association has three main goals: to advocate for a unified voice for the Hong Kong fintech ecosystem, to put together different parts of the community and to educate and nurture the young generation and learn from the existing leaders.
In November 2018, Hong Kong Fintech Week, a cross border financial technology event took place in Hong Kong and Shenzhen. The event attracted over 8000 senior executives from different companies and featured more than 200 world’s fintech founders, regulators, investors, and academics. All these people helped shape the future of financial services by promoting a technological revolution in the industry across Asia and worldwide. The event lasted for one week and was held under InvestHK and FinTechHK. The event showcased panel discussions and workshops, on themes such as the promotion of virtual banks, blockchain technology, artificial intelligence, Fintech in China etc.
Governments from all over the world support the growth of fintech. There are around 550 fintech companies based in Hong Kong, many of which eyeing the world’s most significant marketplace of Fintech just across the border. Hong Kong’s long standing status as a major financial center puts the city in the perfect position to become a global fintech hub — and it already has.
