Let's Talk Payment (goo.gl/9FLHOR)
Date: 23 January 2017
LTP recently had the pleasure of interviewing Charles D’Haussy, Head of FinTech at Invest Hong Kong. Here are excerpts from that interview:
LTP: Please tell us about yourself, your experience and current work.
Charles d’Haussy: I am Charles d’Haussy, Head of FinTech at Invest Hong Kong (InvestHK) since September 2016. I’m a French national and I started my career in Hong Kong 13 years ago. Like other expats here, I have enjoyed and seized the vibrant opportunities in Hong Kong and China by setting up my own company here early in my career. Before joining InvestHK, I also worked for a leading online broker and digital wealth platform with business in Hong Kong and Japan.
I am very glad to head the new dedicated FinTech team set up by InvestHK. My team is responsible for helping overseas and Mainland FinTech companies to establish or expand their business presence in Hong Kong through free, confidential and customized services. We also lead campaigns to promote Hong Kong as a premier FinTech Hub which attracts the best and brightest in the industry. As part of this drive, I will attend the Paris FinTech Forum on January 25 and 26 to demonstrate Hong Kong as a FinTech hub to grow your business.
LTP: What are the hallmarks of Asian FinTech hubs in comparison to European ones?
CH: FinTech is rapidly growing in Asia and it is well-known that nowhere more so than in mainland China. What really makes Hong Kong stand out is its location. It’s a fantastic launch-pad for China and other parts of the region – from Hong Kong you have access to half the world’s population within five hours. Hong Kong has all the ingredients to be the global and regional FinTech hub. It is one of the international financial centers, the freest economy, rule of law, large talent pool, a strong legacy of trade and work ethic. As well, Hong Kong is a very nice place to live in high efficiency and flexibility. The nature of the city makes networking and meeting people very easy. The Hong Kong SAR (HKSAR) Government has pledged full support to the FinTech sector, mentioned by our Chief Executive in his latest Policy Address. Together with a strong lead from the private sector, the FinTech ecosystem in Hong Kong has become more vibrant.
LTP: How does HK compare to European hubs in terms of the scale of the FinTech industry, access to capital, ease of starting and conducting a business,etc.?
CH: Hong Kong is consistently ranked as one of the strongest startup hubs in the world, a city most famous for its vibrancy and entrepreneurial spirit. In term of access to capital for FinTech, the top 10 investments in Asia-Pacific FinTech ventures occurred in China and Hong Kong, accounting for 90% of overall Asia-Pacific investments and valued at $8.75 billion, while the APAC region has eclipsed Europe, which attracted $1.85 billion in the same period. Asia already has some of the world’s largest FinTech companies, Ant Financial being the standout example. Hong Kong is always ready to work with the major European FinTech hubs such as London and the fast-growing Berlin because we have a strong tradition in working with the British and Europeans, not to mention that we have a significant European community of around 60,000 people here. Ask your friends’ experiences in Hong Kong. No matter they are just new in town or already settle down for long here, they can always be fascinated by the opportunities and possibilities here.
LTP: What are the main challenges that European FinTech startups currently face?
CH: The challenges for European FinTech companies are actually similar to those in many other parts of the world; converting concepts into products that can go to market, and then scaling up lies at the heart of it. Location, language and culture inevitably play a part, as does the need to develop scale – there’s nothing new here, it’s been the same for centuries.
LTP: How does HK as a global financial center and one of the hottest FinTech hubs address those challenges to empower European FinTech startups and entrepreneurs? What is the unique value proposition of Hong Kong as a FinTech hub for European startups and entrepreneurs?
CH: As I have mentioned, Hong Kong offers excellent location. It’s a fantastic launch-pad for China and other parts of the region. We are close to the Pearl River Delta Region, which is a fabulous Southern China market on our doorstep to test and explore.
Just at beginning of January, Hong Kong and Shenzhen signed a Memorandum of Understanding on jointly developing the Lok Ma Chau Loop. This will be a perfect marriage between the software (talent, services, management) of Hong Kong and the advanced hardware in Shenzhen. This 87-hectare project at the border will be the largest innovation and technology platform ever established in the history of Hong Kong.
Related higher education, cultural and creative – as well as other complementary facilities – will be provided at the site, creating unprecedented space and opportunities for the development of innovation and technology in Hong Kong and Shenzhen. We welcome the European FinTech startups and entrepreneurs to explore and enjoy the open environment on cross-border trade and exchange.
LTP: What are some of the steps that HK authorities have been taking? What are the initiatives that have been launched to enhance the opportunities for international/European FinTech startups in HK?
CH: With regard to developments more specific to FinTech, the Hong Kong Monetary Authority (HKMA) announced various new initiatives to support FinTech development in Hong Kong.
- HKMA and the Hong Kong Applied Science and Technology Research Institute (ASTRI) set up its own FinTech Innovation Hub. This will be equipped with all necessary systems and support resources to allow those in the banking and payment industry to conduct proof-of-concept trials of products and services.
- The launch of FinTech Supervisory Sandbox allows startups which partner with banks to conduct testing and trials of new technologies and applications on a pilot basis. Within the sandbox, banks can try out new products without the need to achieve full compliance with HKMA’s supervisory requirements.
- Recently, HKMA and ASTRI jointly launched the FinTech Career Accelerator Scheme (“FCAS”) to nurture talents to meet the growing needs of FinTech in Hong Kong. FCAS is supported by 11 banks and nine universities. It aims to provide practical internship for undergraduate and postgraduate students interested in developing their careers in the FinTech industry.
- Moreover, at the beginning of December 2016, HKMA and the UK Financial Conduct Authority (FCA) entered into a Cooperation Agreement (agreement) to foster collaboration between the two regulatory authorities in promoting financial innovation. According to the Agreement, the HKMA and the FCA will closely collaborate on a number of initiatives such as referrals of FinTech firms, joint innovation projects, information exchange and experience sharing, to facilitate financial innovation in Hong Kong and the United Kingdom.
Besides that, the HKSAR Government injected HK$5 billion into the Innovation and Technology Fund (ITF) in 2016 which benefits FinTech and other startups. Besides that, it did the following:
- Injected HK$2 billion to launch a Midstream Research Program for Universities to provide funding support for universities to carry out more midstream and applied research projects in key technology areas;
- Increase the level of cash rebate under the R&D Cash Rebate Scheme to 40% in order to encourage private enterprises, SMEs in particular, to put more resources into R&D works;
- Extend the Public Sector Trial Scheme to cover the incubatees of the Cyberport and the Hong Kong Science and Technology Park (HKSTP) for funding their production of prototypes or samples and conduct trials of their R&D results and facilitating commercialization;
- Extend the scheme that provides funding support for the technology transfer work of six universities by three years to 2018-19; and
- Continue with the Technology Startup Support Scheme for Universities to assist technology startups established by university teams in commercializing research results.
Other new measures include:
- Setting up an HK $2-billion Innovation and Technology Venture Fund to co-invest with private venture capital funds on a matching basis in local technology startups;
- The HKSTP will expand in stages to provide additional floor area of 70,000 square meters for startups and other technology companies by 2020, with the project estimate amounting to HK$4.4 billion to be borne jointly by Government and HKSTP;
- Cyberport will earmark HK$200 million to invest in its startups. HKSTP will continue to support startups through its Corporate Venture Fund and incubation programs.
FinTech startups will benefit from these initiatives along with other types of startup.
- In December 2016, the Smart-Space FinTech co-working space for financial technology startups and companies was launched at Cyberport.
- The space offers 35,000 square feet and aims to accelerate FinTech transformation and development.
- Features an information lab, service corners and training rooms for startups, renowned accelerators and quality partners to develop solutions and enhance business development, along with series of networking events to foster partnership and collaboration among the community.
- About 300 university students will be arranged to join FinTech training camps in overseas universities to gain more in-depth understanding of career prospects in the sector.
As you can see, a lot has been going on and a lot more will go on in the coming year. Much of it on-going work, I think it’s worth adding that the government is making a big push to explore the application of blockchain technology in the financial services industry. HKMA released a Blockchain white paper in November 2016. More researches and regulations will be further discussed.
LTP: Please, tell us more about the InvestHK. What is its key value proposition and how does InvestHK help European FinTech startups? (Structure, services, events)
CH: InvestHK is the department of the HKSAR Government established in 2000 to attract foreign direct investment and support overseas and Mainland businesses to set up or expand in Hong Kong. It provides free advice, confidential and customized services to help businesses succeed in Hong Kong’s vibrant economy.
In addition to startups, InvestHK is also tasked by the Financial Services and Treasury Bureau of the HKSAR Government as the promotion vehicle of Bureau’s FinTech initiative. As a result, in 2016, InvestHK set up a dedicated FinTech team to act as a one-stop platform to attract and assist overseas FinTech startups and companies to set up or expand in Hong Kong. The team reaches out to the FinTech communities through a diverse range of channels including but not limited to traditional and social media, overseas promotion and sponsored events, to promote Hong Kong as a leading FinTech hub in Asia.
In November 2016, an inaugural FinTech Week was held in Hong Kong, attracting more than 2,500 participants and an array of international FinTech companies and startups looking to grow their business, as well as accelerators, incubators and investors searching for opportunities and innovation.
That’s essentially what InvestHK does and how its FinTech section works. Come and meet us in person or join our presentation at the Partner Stage during the Paris FinTech Forum from January 25 to 26 and find out how to scale your business from Hong Kong.
LTP: What are some of the notable examples of startups that InvestHK worked with to help launch/expand/finance in HK? What role did InvestHK play in those cases?
CH: Please visit our Hong Kong FinTech dedicated website and you could find many success stories assisted by InvestHK. Please feel free to subscribe yourself for the latest news and trend on Hong Kong FinTech or simply follow us on Twitter.
Of course, as a new team, we are working hard to reach out potential FinTech startups and companies. Many on-going negotiations and assistances in the following aspect are being done:
LTP: What are the milestones that you have set for InvestHK in 2017 and beyond? Expansion of services, collaborative initiatives with other hubs, etc.?
CH: We obviously want to see growth in our FinTech sector and are actively working on that. We have some priorities of focus: Blockchain, cybersecurity, InsurTech, RegTech and WealthTech. Besides, we kicked start 2017 with the successful FinTech Finals, a global event organized by Next Money held in Hong Kong on 17–19 January. Out of the 23 finalists, five were from Hong Kong. We’re devoting to attract more overseas and China FinTech companies and events to Hong Kong, see how they interact and exchange with the local community and grow the ecosystem here organically. Our InvestHK FinTech Week, scheduled for November will again play a significant part, bringing the latest thinking and technology to Hong Kong.