Hong Kong 'ideally placed' to become fintech start-up hub: experts
Hong Kong’s position as a major financial centre with a large talent pool makes it well placed to become a centre for financial technology start-ups, according to industry players.
Government body InvestHK said financial technology, or "fintech", start-ups are fast becoming an important part of the city’s start-up scene and provide an opportunity to catch up with Silicon Valley and London’s Silicon Roundabout.
“One of the areas where we see real potential for Hong Kong to emerge as an innovative hub is in fintech because we are a major financial services centre, we’ve got a significant percentage of our GDP coming from financial services directly and indirectly,” said Simon Galpin, director-general of investment promotion for Invest HK.
Fintech companies offer services providing an alternative to traditional banking offerings such as small business lending to data analytics and software designed for investment banks.
Since 2010, InvestHK has helped 33 overseas fintech businesses to build their projects in Hong Kong and is currently assisting 38 firms in establishing themselves in the local market.
As the number of start-ups in the city has grown, two accelerators have been launched to help fintech companies to find their feet.
Last autumn, management consultancy firm Accenture picked Hong Kong to host its first 12-week fintech accelerator in Asia and recently closed applications for the programme’s second year in the city.
In April, Singaporean bank DBS and Hong Kong incubator Nest launched a fintech accelerator to provide mentorship and assistance to eight start-ups from around the world.
“This city is uniquely positioned to help these companies, there is a lot of brain power in this city,” said Simon Squibb, chief executive officer of Nest.
“You add that to the fact that certainly at the early stage for businesses, they need seed capital and there are a lot of entrepreneurs here willing to invest in these companies and help them grow.”
Squibb said the city’s international outlook is a strength, adding that 50 per cent of applicants to the accelerator from Hong Kong with international interest from Europe and North America.
James Lloyd, head of strategy and corporate development at alternative small business lending start-up AMP Credit Technologies, said the complexity and strict regulation of the financial industry mean potential entrepreneurs are more likely to come from a finance background.
Lloyd said he receives pitches every other day from bankers who have seen the growth of fintech start-ups in Silicon Valley and London and are looking to start their own businesses.
“Is Hong Kong somewhat behind? I would say yes,” Lloyd said.
“But we’ve an opportunity to really leap frog ahead simply by virtue of the vast number of highly skilled, highly trained individuals working in the big financial institutions.”