Update | HKMA embraces FinTech as it burnishes Hong Kong’s brand to compete as Asia’s financial hub

The Hong Kong Monetary Authority has unveiled a series of policy initiatives for banks to embrace technology, as it sharpens its edge to compete with Singapore and Tokyo as Asia’s financial centre.

The HKMA will set up a FinTech Innovation Hub and a FinTech Supervisory Sandbox, two initiatives aimed at spurring banks to embrace technology to make financial transactions safer, speedier and more convenient for consumers.

“Technology has provided many new and very convenient means to conduct financial transactions, ranging from the basic payment and banking services to the more sophisticated trading and investment activities,” HKMA Chief Executive Norman Chan said at Hong Kong’s annual Treasury Markets Association gathering on Tuesday. “Without compromising consumer and investor protection, the HKMA embraces the use of FinTech and innovation.”

The HKMA’s FinTech hub with the Applied Science & Technology Research Institute will provide a controlled environment separate from banks’ internal systems, where financial institutions can be equipped with the needed resources to develop technology products related to finance.

“While some of the largest banks have built their own laboratories, this new FinTech hub will cater for the big and small institutions alike such that the industry as a whole would be able to adopt new technologies more speedily and in a more collaborative manner,” Chan said.

The Sandbox initiative provides a speedier approvals process for FinTech experiments. With the HKMA’s approval, banks can test their FinTech pilot services without requiring a third-party assessment. Once the tests are successful, they can be further tested by the HKMA before being allowed to be launched for public use.