An emerging Asia-Pacific fintech hub: Hong Kong
For decades, Hong Kong made its mark as the region’s leading financial centre, vying with New York and London for supremacy as a global nexus of money. Shaken by the Asian financial crisis, SARS, and the rise of Shanghai, gloomy predictions about Hong Kong swirled during the early years of the new millennium.
Two recent events however, may swing momentum back in favour of Hong Kong: The United Kingdom’s vote to leave the European Union in June 2016, and the election of Donald Trump as the incoming 44th president of the United States. Both add uncertainty to the global economic environment; while Hong Kong has its own issues to contend with, the city’s financial sector looks robust enough to weather short-term disturbances.
Confirming the growing prominence of financial technology (fintech) startups, InvestHK hosted the inaugural Hong Kong Fintech Week last month (November 7 to 11). More than 2,500 participants took part during the week, taking advantage of the high-calibre speakers and the array of events on offer. Notable participants included China's biggest peer-to-peer lending and wealth management platform Lufax, online insurer Zhong An, JD Finance, WeBank, and Hong Kong-based bitcoin exchange BTCC. James Lau, the Acting Secretary for Financial Services and the Treasury, remarked, "Hong Kong is committed to supporting fintech development, as it leverages our financial markets, institutional network, talent pool, and effective legal framework."
Supported by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA), Accenture, Cyberport, Finnovasia, the Hong Kong Applied Science and Technology Research Institute (ASTRI), the Hong Kong Science and Technology Parks Corporation (HKSTP), NexChange and the Finovate Group, highlights of the week included FinovateAsia 2016 – where 36 fintech startups had a mere seven minutes to showcase their innovations – and the Hong Kong Fintech Community Conference that saw leading entrepreneurs and investors in the field exchange cutting-edge ideas.
Both the Hong Kong government and the private sector have enthusiastically welcomed fintech’s expansion: Last year, Chief Executive Leung Chun-ying announced a HK$2 billion fund to spur development in technology and innovation, while InvestHK played a role in launching eight fintech firms in 2015. Accenture reported the Asia-Pacific region attracted close to US$3.5 billion in fintech investments during the first nine months of 2015; Hong Kong, with its deep links with China, is well placed to ride this wave for years to come. The PRC is home to the world’s four highest-valued fintech unicorns, for instance, while Alipay and Tencent already process more financial transactions than conventional Chinese banks.
Fintech covers an incredibly diverse range of companies, so what businesses might suit Hong Kong best? The Associate Director-General of Investment Promotion of InvestHK, Charles Ng, said the organisation is looking for blockchain, cyber security, wealthtech, insuretech, and regulatory technology companies and startups. “Promoting Hong Kong as a leading fintech hub and attracting top fintech talent are high priorities for InvestHK,” Ng added.