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What are the opportunities from FinTech?

Hong Kong as an international financial center has recently ranked as the world’s freest economy for the twenty-fourth consecutive year by the Heritage foundation. Indeed, the Hong Kong government works a lot towards promoting and enhancing the competiveness, such as easing the listing conditions for firms with the opportunity offered by the “One Belt, One Road” and maintaining a low rate and simplicity in tax policies. However, facing the growth of the Singapore’s economy, the China’s economic policies reform and many other external threats, Hong Kong should be alerted and plan ahead in order to face the challenges and to maintain the international financial status.

Instead of solely focusing in the traditional financial services, exploration in new sectors like Financial Technology (FinTech) becomes essential. FinTech is the application of technology in the design and delivery of financial services and products with innovation. These changed our norms in financial and banking behavior, like the wide use of cloud funding and peer-to-peer lending. Hence, despite  having the advantages in owning the pride of financial market positioning, innovation becomes critical for Hong Kong to become a leading financial technology center and to be successful.

In terms of technology usage, application of blockchain may speed up the development of FinTech. For instance, its immutability, irreversibility, programmability and instantaneity can reduce the cost of financial transactions while the accuracy can also be enhanced. Smart contract and property estimations are good proofs of the of FinTech establishment which also brings convenience to the consumers. To drive the development of FinTech, government is playing a key role in order to promote Hong Kong as the leader of financial technology center. In particular, government has to promote and develop Hong Kong as a smart city with FinTech professionals, technology development subsidy, appropriate regulatory supporting and strengthen the role of Fintech Facilitation Office.

It is a fact that we cannot ignore information security while we are promoting FinTech. Back in 2016, there were four banks being hacked to access customers’ bank account information and make transactions without any authorization. Hence, HKMA and SFC have enforced Competency Framework for Banking Practitioners in Cyber security and Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading respectively as to increase market’s confidence in performing and promoting e-transactions.

If Hong Kong has to become a leading financial technology center, we must study every possibility, be innovative and bring forth the new through the old.