Hong Kong Well-placed to be Global FinTech Hub

Hong Kong Well-placed to be Global FinTech Hub

Sources: SCMP

PUBLISHED : Friday, 25 January, 2019, 10:04am
UPDATED : Friday, 25 January, 2019, 10:04am

 

Hong Kong’s FinTech sector is set to be a major game-changer in the world’s financial industry thanks to dedicated government team with offices in London and San Francisco. Biz@HKUST speaks to Charles D’HAUSSY, Head of FinTech at InvestHK, on how it is attracting top enterprises, startup entrepreneurs, investors and other stakeholders to help put Hong Kong at the forefront of this rapidly emerging sector.

When it comes to promoting financial technology, there is no shortage of initiatives taking place in Hong Kong, according to Charles d’Haussy, Head of FinTech at InvestHK, the local government’s investment promotion arm.

There are now some 550 FinTech companies based in Hong Kong, d’Haussy notes – a steady increase from about 140 in 2016. Of these, 52 per cent are from abroad while the remainder are local. “The growth is really significant,” he says.

As new technologies lead the world into a new era, d’Haussy stresses that despite the negative narrative about their impact on jobs, FinTech, Blockchain and Artificial Intelligence (AI) will create a wealth of new careers with diverse opportunities.

“People should look to work with technology and not be afraid of it,” d’Haussy says, adding that new jobs in the sector will come from a range of professions and responsibilities for highly skilled individuals. “A career in FinTech is not only for students from a financial background.”

Allaying suggestions that Hong Kong lagged behind other Asian jurisdictions for FinTech development initiatives, d’Haussy hastens to add that with the introduction of the Octopus card to Hong Kong in 1997, which has become a ubiquitous part of the city’s daily life, Hong Kong has been a FinTech pioneer long before the word FinTech was invented.

What’s more, a clear indication that the Hong Kong Government is taking FinTech seriously is a HK$500 million fund launched to develop financial services over the next half-decade, including FinTech and other groundbreaking technologies. The Hong Kong Government also injected HK$5 billion into the Innovation and Technology Fund (ITF) in 2016 which benefits FinTech and other startups. While FinTech is growing rapidly in Asia – and nowhere more so than in mainland China – d’Haussy explains that development on the mainland is mainly focused on consumer-orientated payment systems whereas Hong Kong’s business-to-business (B2B) environment is totally different.

“Payments are only a part of FinTech,” says d’Haussy, noting that the technology in Hong Kong is focused on developing complex systems for banking, finance, insurance, FinTech regulation and market-to-market wealth management activities. Importantly, these are key development areas that closely align with Hong Kong’s strategic advantages, which include being a key international financial center renowned for having one of the world’s freest economies, high-tech infrastructure and extensive strategic business connections with the mainland. In particular, Hong Kong sees its role as a conduit for global FinTech firms to enter the mainland market and as a springboard for businesses from across the border to “go global”. “FinTech grows the fastest in markets where there is international finance,” d’Haussy adds.

Dispelling the perception held by some that Hong Kong’s high office rents could be a barrier to attracting potential overseas FinTech companies and investors, d’Haussy says such expenses are similar in other international B2B markets such as New York, London, Singapore and Tokyo. Likewise, rival centers also face the challenge of acquiring and retaining talent. Globally, banks ramping up their FinTech development activities find themselves in competition with startups and expanding firms that are looking to attract FinTech professionals from the same talent pool.

“Acquiring the right people is a challenge in all the global FinTech markets,” d’Haussy says. HKUST has responded by inaugurating FinTech courses into existing programs, and in September 2019 will launch one-year full-time or two-year part-time Master of Science (MSc) FinTech programs that focus on Blockchain, FinTech, AI and compliance and regulation. To make life easier for employers looking to recruit talent with specific skills, the government has rolled out a Technology Talent Admission Scheme (TechTAS) to accelerate the admission of R&D talent from overseas and Mainland China. The list focuses on 11 professions including FinTech, cyber-security and innovation and technology.

With part of InvestHK’s portfolio of activities making FinTech more visible to students, d’Haussy says educational events organized by universities and academic institutions during Hong Kong’s 2018 FinTech Week at the end of October, which included HKUST-supported speaker presentations, are prime examples of collaboration between business and academia.

The event, the third edition of Hong Kong FinTech Week, attracted more than 10,000 attendees from more than 50 countries and included presentations by the world’s top FinTech founders and CEOs, investors, regulators and academics. Additionally, the event spotlights the potential for Hong Kong’s FinTech sector to act as launching point for the Guangdong-Hong Kong-Macau Greater Bay Area (GBA). “The government and regulators always try to facilitate trade for new existing businesses, which is why companies want to come to Hong Kong where commercial opportunities are numerous,” d’Haussy says.