Innovative financial technology (fintech) businesses in Hong Kong or Singapore are set to benefit from a new cooperation agreement that will help them expand their operations into the other jurisdiction.
The Hong Kong Monetary Authority (HKMA) and Monetary Authority of Singapore (MAS) announced that they had signed a fintech cooperation agreement on Wednesday. The agreement "formalise[s] the collaboration between the two authorities on referrals of innovative businesses", the HKMA said in its statement.
The agreement will also see the regulators share information and exchange expertise on fintech.
The regulators also announced that they will work together on a "strategic project on trade finance cross-border infrastructure, based on distributed ledger technology". MAS said that more details would be announced on the project in November. HKMA said seven banks in Hong Kong are involved in the initiative.
"Seven banks in Hong Kong have decided to commercialise an HKMA-led, distributed ledger technology (DLT)-based, trade finance proof-of-concept into a production system named Hong Kong Trade Finance Platform (HKTFP) to digitise and share trade documents, automate processes and reduce risks and fraud," the HKMA said. "The HKMA is in discussion with the MAS on building a cross-border infrastructure to connect HKTFP with a similar trade platform in Singapore."
Chief executive of the HKMA, Norman Chan, said technology is "a game changer for the future of banking and payment services" and will "differentiate winners from losers".
"I am very pleased to say that Hong Kong has made important progress in cross-border collaboration and the research on DLT applications," Chan said. "The collaborative efforts and enhanced research and talent development are the essential building blocks to facilitate financial innovation and prepare Hong Kong to advance to the new smart banking era."
Ravi Menon, managing director of MAS, described the fintech cooperation agreement with the HKMA as one of MAS' "more significant" such deals because of the "extensive financial and trade linkages between Singapore and Hong Kong".
"We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres," Menon said.
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