Fintech

Alliance of banking big hitters to tackle threat of unregulated fintech in Hong Kong

Alliance for Financial Stability with Information Technology will hold its inaugural meeting in Central next week

PUBLISHED : Friday, 04 May, 2018, 7:01am
UPDATED : Friday, 04 May, 2018, 3:46pm

An influential new international alliance of senior bank officials, financial regulators and monetary chiefs will launch in Hong Kong next week to help address the threat they believe an unregulated fintech (financial technology) revolution poses to economic stability.

A high-powered and hand-picked group of big hitters from the world of banking and finance, along with experts from the information technology sector, will gather in Central on May 9 for the inaugural forum of the Alliance for Financial Stability with Information Technology, as it will be known.

Central bank governors from 10 Asian countries have accepted invitations to attend, and China is also expected to be represented by a senior regulatory official.  

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It is understood that Anthony Neoh, chief adviser to the China Securities Regulatory Commission and a former chairman of the Hong Kong Securities and Futures Commission (SFC), will assume the role of chairman. 

Andrew Sheng, who also headed the SFC and who served as deputy chief executive of the Hong Kong Monetary Authority, will feature prominently as co-chairman. 

The non-profit organisation, funded by donations from the private sector, hopes to promote discussion on how to secure systemic financial stability in the digital age. 

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One of its focuses will be on fostering regional and international collaboration and discussion on how innovative fintech – such as know-your-customer facial recognition technology recently installed across the ATM network of casino hub Macau as part of an ongoing crackdown on money laundering and capital flight from China – can be used and adapted to benefit both service providers and regulators.

The growth of mobile payment services in an unregulated environment will also be an area of its work.

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“It will be a collaborative platform to bring together fintech system providers, regulators and banking authorities across Asia and the wider world,” a source familiar with planning for the launch said.

“The idea of an informal alliance was decided because, typically, central banks and financial regulators do not regulate financial platforms.”

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The idea first surfaced at a meeting of banking and financial regulators from mainland China, Hong Kong and Macau at the casino hub and former Portuguese enclave in May last year.

Registered in Hong Kong, the group will have offices here and in Macau, and will employ a small number of staff in each to begin with.

The alliance also aims to find ways of putting regulators “ahead of the game” amid mounting concerns over the proliferation of unregulated finance platforms and cryptocurrency ICOs of questionable standing.

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Among those spearheading the launch of the new alliance is Anselmo Teng, who recently stepped down as chairman of Macau’s Monetary Authority, and Clarie Lo, a former top Hong Kong financial official and commissioner for narcotics.

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In recent months, both Hong Kong and Macau monetary authorities have issued warnings about the risks associated with cryptocurrency ICOs, while Beijing has taken a hard line against unregulated financial platforms.