Hong Kong’s fintech competitiveness against rivals like Singapore hurt by talent crunch, regulatory hurdles: Google survey

Many fintech start-up executives surveyed by Google view Hong Kong as being relatively uncompetitive compared to other fintech hubs
More than 60 per cent of them said they face a severe talent gap amid intense competition from other regions for skilled manpower

Fintech

Xinmei Shen

Published: 7:00pm, 23 Aug, 2022

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Financial technology executives in Hong Kong are concerned about the city’s competitiveness as an industry hub, as complex regulations and a talent shortage drag down business prospects, according to a survey conducted by US tech giant Google and financial consultancy Quinlan & Associates.

The survey, which interviewed 126 C-suite executives from early-stage and late-stage private fintech companies, found that around 60 per cent of respondents see Hong Kong as being relatively uncompetitive compared to other fintech hubs.

More than half of the respondents find Hong Kong’s current regulatory set-up costly, complex and time-consuming, according to the research report released on Tuesday.

Roughly 64 per cent of the respondents also said they face a “severe talent gap” and intense competition from other regions to secure manpower – a problem that has been exacerbated by the Covid-19 pandemic.

In June, the Hong Kong Monetary Authority pledged to “groom all-round fintech talent, both students and practitioners”. Photo: Handout

Amid stringent border control and quarantine measures, as well as Beijing’s introduction of a national security law in Hong Kong in 2020, more than 113,000 residents left the city over the past 12 months, according to figures released by the local Census and Statistics Department earlier this month.

The migration wave, along with a historically low birth rate, contributed to a record 1.6 per cent drop in Hong Kong’s population during the period, igniting concerns that the city’s status as an international financial hub may be in decline.

While executives surveyed by Google said the industry’s talent gap is most severe in the field of product innovation, the vast majority of them said their highest-priority recruits in the next year or two are sales and marketing workers.

More than 80 per cent of the survey’s respondents hope to see more supportive policies from the Hong Kong government, such as hiring subsidies for fintech talent.

In June, the Hong Kong Monetary Authority, the city’s de facto central bank, released a four-year plan for the fintech industry, pledging to “groom all-round fintech talent, both students and practitioners”, and look into providing funding support for qualified fintech projects.

Google also said it is working with Cyberport, one of Hong Kong’s two biggest government-backed start-up accelerators, to support fintech start-ups.

Their “Igniting Start-ups & Fintechs Programme”, launched in February, has so far enrolled more than 120 start-ups, with 24 having received approval for up to US$200,000 of Google Cloud credits each, the companies said on Tuesday.

In addition to its efforts in Hong Kong, Google is also strengthening its operations in Asia by “deepening collaboration” with Singapore, where the company just opened its third data centre in the country, Scott Beaumont, president of Google Asia-Pacific, recently told Bloomberg.

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