Hong Kong aims to steal leadership of Singapore and Tokyo as Asia’s most significant financial centers. The Hong Kong Monetary Authority (HKMA) has changed the tax regime to attract corporate treasury departments and announced a number of initiatives intended to embrace technology.
“Technology has provided many new and very convenient means to conduct financial transactions, ranging from the basic payment and banking services to the more sophisticated trading and investment activities,” the HKMA’s chief executive Norman Chan said at Hong Kong’s annual Treasury Markets Association gathering on Tuesday. “Without compromising consumer and investor protection, the HKMA embraces the use of FinTech and innovation.”
The HKMA is planning to launch a FinTech Innovation Hub and a FinTech Supervisory Sandbox to adopt technology for safer and faster financial transactions.
The FinTech Innovation Hub in collaboration with the Applied Science & Technology Research Institute will work of the development of a controlled environment separate from banks’ internal systems, where financial institutions will have all necessary resources to develop technology products related to finance.
“While some of the largest banks have built their own laboratories, this new Fintech hub will cater for the big and small institutions alike such that the industry as a whole would be able to adopt new technologies more speedily and in a more collaborative manner,” Chan said.
The FinTech Supervisory Sandbox will provide faster approval process for fintech trials. The HKMA’s approval will be enough to test fintech services with no need for third-party assessment. The HKMA will test products itself too before the launch for public use.
“FinTech is a worldwide trend and Hong Kong banks need to develop in the area quickly,” said the Hong Kong Institute of Bankers’ senior consultant Wilson Chan, who supports the HKMA moves.
The FinTech Innovation Hub will offer to test innovations in biometric authentication technology, such as facial or voice recognition techniques used in the payments industry.
“Many overseas markets such as the US and Singapore have developed their FinTech quickly,” said ICAP’s North Asia regional chief executive Benny Luk, who said Hong Kong lags behind other cities. “The HKMA’s new measures will help Hong Kong catch up.”
In April, Hong Kong outstripped Tokyo as the world’s fourth-largest foreign exchange trading center. The Bank for International Settlements has stated in its triennial survey of foreign-exchange trading in 60 global markets that average daily foreign exchange turnover in Hong Kong surged 59 per cent to US$437 billion in April, compared with the same period in 2013.
Now, Hong Kong can also benefit from the so-called One Belt, One Road project started by the Chinese government for the purpose of developing transportation infrastructure linking China via the ancient Silk Road with 60 countries in Asia, the Middle East and Europe.