Hong Kong is uniquely positioned where China meets the Western world – geographically, culturally and politically. And it’s where fintech is pushing the boundaries, as The Fintech Magazine’s Doug MacKenzie discovered
Hong Kong’s annual Fintech Week might have gone under the radar due to its proximity in timing and geography to the Singapore FinTech Festival – the world’s biggest. But, given recent events in China’s special administrative region (SAR), there was no chance of that.
While democracy protestors were on the streets in 2019, Hong Kong regulators were working with the first eight startups to be given freedom to launch with virtual banking licences – including Ant SME and a Tencent joint venture. Meanwhile, rumours were rife that Ant Financial – the most valuable fintech in the world – was planning an IPO on the Hong Kong stock exchange, its affiliate company, the giant Chinese etailing conglomerate Alibaba, having done likewise earlier in the year
Hong Kong is a different beast to Singapore and, as a result, its week plays a very different role. Comprised of three parts (a formal conference, visits to Hong Kong’s numerous innovation labs and a day trip to meet fintechs in China’s own ‘Silicon Valley’ of Schenzen), it’s designed to highlight the territory’s unique position as a bridge between two worlds: East and West.
Thanks to its location, the event pulls in thousands of tech and financial entrepreneurs and industry experts from the world’s second most powerful economy, China, and thousands more fly into Hong Kong Airport from around the globe.
So, with only a week to get an understanding of the Hong Kong fintech scene, I knew I was in for a challenge. There are at least 600 fintechs and more than 100 innovation labs operating in the vertigo-inducing city. However, I was tipped off that the first port of call when getting to know the tech scene here is Cyberport.
The business park describes itself as a ‘digital’ community, which might sound impossible when its physical presence totals 119, 000 square metres of office space. However the community that is incubated inside its Bond-villain-style campus really strives to embody the digital innovation revolution. From vertical, soil-less farms to coin repositories that convert your cash into your digital wallet, Cyberport screams the future. I was there, of course, to see fintechs and I spoke with nearly two dozen of them – all of whom really stretched the imagination of what fintechs could do… take Next Billion, a company that can help the millions of corner shops around the world achieve an effective stock check and inventory supply, and Sakai, a startup that helps connect informal modes of transport, such as tuk tuks, tricycles and e-jeeps, to your digital route planner.
While there, I got the chance to interview Charles Ng, the executive director of InvestHK, which is the government arm behind Hong Kong FinTech Week and is driving foreign investment in the region. He gave me an idea of the appetite that Hong Kong now has when it comes to fintech. The Hong Kong Monetary Authority chief executive Eddie Yue had described the SAR’s regulators as being traditionally conservative in their approach, but after hearing from Ng about plans for fintech in the near future, there is clearly a transformative reappraisal afoot.
Ng also pointed to an important distinction between Hong Kong and its regional rivals –
Hong Kong already has all the traditional institutions, including banks and insurance firms, in place and they’re ready to collaborate.
The Hong Kong FinTech Week Conference, would be a graduation of sorts for many of the fintechs I had met over the first two days and would be the culmination and celebration of the industry as a whole in Hong Kong.
In March, Hong Kong hosts another fintech-focussed event: Blockchain Week. The event will look at the range of applications that distributed ledger technology (DLT) can offer across industry, and throw a spotlight on issues such as digital renminbi; digital asset management; regulatory hurdles across various jurisdictions; the latest DLT solutions for payment networks and banking; and the social impact and sustainability of blockchain projects (see www.hkblockchainweek.net/).
This month, the subsidiaries of Hong Kong Interbank Clearing Ltd and the Institute of Digital Currency of the People’s Bank of China (PBoC) are due to start a proof-of-concept trial that aims to connect eTradeConnect, a blockchain-based trade finance platform funded by a consortium of 12 major banks in Hong Kong, and the PBoC Trade Finance Platform.