The Hong Kong government continues to focus on fintech, and
making the city an attractive place for the industry.
According to Financial Secretary John Tsang in his 2016-17
Budget speech, Hong Kong's extensive trade network, the open
market operating under the rule of law and total transparency,
together with the resilience and resourcefulness of the people,
will provide the required conditions for this new economic
The city has been one of the fastest growing start-up hubs in
the world; there are more than 1,600 start-ups, up 50% since 2014.
And, the government is setting up a HK$2 billion Innovation and
Technology Venture Fund to invest in local technology start-ups
together with private venture-capital funds.
Companies should explore the existing Hong Kong fintech
eco-system and the support they can receive from the local
government, incubators and accelerators, economic development
agencies, strategic investors, angel investors, venture capitalists
and use of co-working spaces.
Hong Kong's commitment as a fintech hub
According to the Financial Secretary, the potential to develop
fintech in Hong Kong is enormous. The government has set up Invest
Hong Kong, an official online platform to help start-ups,
investors, as well as research and development institutions
establish a presence in Hong Kong.
The Hong Kong Monetary Authority, the Securities and Futures
Commission as well as the Office of the Commissioner of Insurance
will also be establishing dedicated platforms respectively to
enhance communication between regulators and the fintech
Impact of business operations
The global market place is multi-channel; financial institutions
and merchants are offering a 'consumer self-service' point
of sale evolution in order to stay competitive. The increasing
trend towards mobile and the ever-growing security and compliance
requirements create a complex real time business landscape that
puts a huge strain on existing back office systems and
The amalgamation of real time and legacy applications lead to
high cost work around processes that bring down potential business
According to research from McKinsey, banks are looking for
a pay-off from investments made in digital processes, which should
focus on back office automation projects and steer clear of
Real time will be the way forward.
Despite the continuous support from the government, the
city's high cost of living, a limited pool of talented IT
professionals and lack of venture investors are challenges that
companies face. Although it is not a big problem for companies to
raise the first round among angel investors, they may find there is
a funding gap later on.
In order to overcome these challenges and take on the
combined advantages of 'one country', 'two
systems', Hong Kong needs to increase global know-how among
entrepreneurs, improve the availability of top technical talent,
and grow the tech angel investor community and government
The global economy is displaying 'a new normal' –
the volatile financial markets we have been experiencing will be
around for a while.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Relatively unheard of before the beginning of this decade, the word "fintech" (financial technology) has swiftly established its place in everyday language and made it into the Oxford Dictionary.
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