New | Hong Kong’s future is in learning new words: fintech, regtech, wealthtech
Long considered a global financial services hub, Hong Kong has all the conditions needed to create a tech hub, but it just needs to change its DNA
Hong Kong’s role as a global financial hub may be under threat unless the city can embrace technology and adapt quickly to the tectonic changes that have taken place in the financial landscape in the two decade since its return to Chinese rule, experts say.
The future may very well be in the combination of technology with the key pillars of finance, wealth management, insurance, legal and compliance services of Hong Kong’s economy. Three words will be crucial to this future: fintech for financial technology, regtech for regulatory technology and wealthtech for wealth management technology.
“Hong Kong is a fantastic hub that is close to mainland China. It has all the conditions required to create the environment for a technology hub, but it needs to change its DNA,” said Henri Arslanian, PwC’s fintech and regtech leader for China and Hong Kong.
With that objective in mind, over the past year the city has stepped up its efforts to encourage fintech innovation, with the Hong Kong Monetary Authority setting up a fintech innovation hub and a supervisory sandbox to encourage financial institutions to experiment with fintech solutions.
But industry insiders say Hong Kong needs to do even more to transform into a burgeoning hub for financial technology.
Hong Kong’s greatest moment of innovation was in 1997 with the Octopus card, a smart-card payment system that is now a ubiquitous part of daily life. Two decades since, the city has not made further progress and has lagged mainland China in exploring new forms of electronic payment such as Tencent Holdings’ WePay or Alibaba Group Holding’s Alipay.