Hong Kong teams up with Dubai to promote fintech innovation
Move comes as competition heats up between international financial hubs to lead fintech innovation
Hong Kong’s securities watchdog has teamed up with its counterpart in Dubai to promote innovation in the field of financial technology.
The Securities and Futures Commission said on Monday it has entered into a cooperation agreement with the Dubai Financial Services Authority (DFSA) to establish a framework for the two regulators to help each other develop the fintech industry. Finance companies are increasingly using technology and big data to help reduce costs and provide better services to customers.
The two regulators will work together on information sharing, innovation projects and referrals of fintech firms seeking to enter one another’s markets.
“This agreement underscores the SFC’s efforts to strengthen regulatory collaboration and promote innovation in financial services,” said Ashley Alder, chief executive of the SFC.
“We look forward to working closely with the Dubai Financial Services Authority to support fintech development in both our markets.”
Ian Johnston, chief executive of the DFSA, said: “This agreement with Hong Kong’s SFC deepens cooperation between our two markets and will build a common understanding of the principles of good innovation.”
Both cities have been keen to enhance their oversight and development of fintech as competition between financial centres such as London, New York and Singapore to dominate the sector intensifies.
The DFSA earlier this month introduced regulations formalising a tailored regime for loans and investment crowdfunding platforms to enhance the efficiency of markets and provide better services and solutions.
The SFC established its Fintech Contact Point in March last year to help companies to gain a better understanding of local regulations.
The SFC has previously signed similar agreements with the financial regulators in Australia and Britain to promote fintech.
Benny Mau Ying-yuen, chairman of Hong Kong’s Securities Association, welcomed the idea of the SFC teaming up with other international regulators to promote fintech.
There are technology providers who can help brokers to use AI or big data to offer trading tips or executive orders, he said. There are, however, not many brokers widely using these technology as, according to Mau, they are worried these programmes might go wrong and lead to investor losses followed by law suits and potentially huge compensation bills.
“Some financial firms have adopted AI [artificial intelligence] or other technologies in their trading or advisory services for customers but many brokers are still hesitant to widely adopt fintech or AI in their business for fear of liability and regulatory issues,” said Mau.
“If the SFC and other international regulators can issue clear guidelines on fintech regulation, it would encourage more brokers to use the new technologies.”