Opinion | Hong Kong’s future lies with fintech, and it will be bright

Hong Kong is the gateway for Chinese companies to launch internationally, and companies seeking to reach China and Southeast Asia

China is the only major economy expected to grow this year, and represents a big opportunity for Hong Kong fintech

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Digital payment brands are displayed outside a watch shop in a mall in Hong Kong. Photo: Reuters

Published: 10:15am, 23 Aug 2020Updated: 11:15am, 23 Aug 2020

Whether it was the UN trade embargo on China in the 1950s and 1960s, the manufacturing decline in the 1970s, Black Monday, or the many twists and turns since then, Hong Kong has been remarkable for its ability to transform itself through moments of economic crisis.

Today, the city is uniquely positioned among mainland China, Southeast Asia and the rest of the world. It is the gateway for Chinese companies to launch internationally, as it is for companies seeking to reach China’s 1.4 billion people, Southeast Asia and beyond.

This is a geographical advantage that inadvertently belongs to a post-pandemic era as scale becomes one of the most important success factors for fintech companies. Effective delivery of financial resources to massive populations through electronic channels has become paramount.

This puts Hong Kong at the start of a long-term transformation in how people across Asia access their money, and this is likely to be a driving force of positive economic change for the region’s one-billion-plus unbanked population.

Hong Kong’s fintech sector is primed for this moment. Consumer adoption took off at what was perhaps the earliest stage possible, with one of the world’s first smart contactless payment systems, the Octopus card. Yet the sophistication of the city’s smart banking system and high penetration of fintech often escapes the notice of the average critic.

For this reason, our economy should be treated as a subject of careful inquiry, with fintech credentials that sit at both ends of the spectrum. When we think of this year in Hong Kong’s history, we should not interpret the coronavirus-induced recession as the catalyst for this digital transformation. It was already well under way.

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