Asia’s financial hub Hong Kong is seeking to promote city’s prominence in the world’s fast-evolving fintech industry by acting as a "springboard" to help companies leap forward to broader markets, especially mainland China.
Hong Kong wants to attract companies to start their businesses in the city and then help them to "leap" forward to markets in mainland China and elsewhere, said Charles d’Haussy, head of fintech at Invest Hong Kong (InvestHK), in response to China Money Network’s questions during a media briefing held on Wednesday in Hong Kong.
InvestHK is a government department responsible for foreign direct investment, supporting businesses to set up and expand in the city.
Financial technology, that uses technology and innovation to improve services and activities in finance, has been growing at rapid pace globally.
According to statistics conducted by the global venture-finance analytics firm CB Insights, global investment in fintech companies reached an all-time high of US$27.4 billion in 2017, increasing by 18% year-on-year.
Following the development, Hong Kong government in its 2018 budget has allocated HK$500 million (US$63.7 million) over the next five years towards the development of financial services in the city, including fintech.
Investments in Hong Kong’s financial technology firms have more than doubled in the past one year to US$545.7 million in 2017 as against US$215.5 million in 2016, according to data by CB Insights.
"People are not seeing Hong Kong just as a market of seven million people. For mainland companies, they are seeing Hong Kong as a springboard to elsewhere and for global companies, they’re seeing Hong Kong as the gateway to China," Nelson Chow, chief fintech officer at the city’s de facto central bank Hong Kong Monetary Authority, told China Money Network.
China is one of the largest fintech market in the world in terms of volume and transactions. The largest segment of China’s fintech market is digital payment, with a total transaction value of US$819 billion in 2017, according to online statistics, market research and business intelligence portal Statista.
The digital payment service is expected to reach US$1.04 trillion by end of 2018, Statista reported.
Since November 2016, InvestHK in partnership with Asia’s largest fintech community Finnovasia has been holding fintech events annually to provide impetus to the industry in the city.
Fintech companies will benefit by meeting and discussing with the relevant stakeholders in the city’s fintech industry, including the Hong Kong government, regulators, investors, venture capitals and accelerators, said InvestHK in a quarterly newsletter.
Hong Kong fintech regulators pledged a wider policy acceptance to make the city’s fintech sector more attractive to investors.
"Regarding how to evaluate the market facilitation and investment protection, it is a difficult job. But it is a core principle in our minds. So we will carefully consider whether the regulation is necessary in light of market development, investors’ interests and Hong Kong financial market as a whole," said Clara Chiu, director at Securities and Futures Commission, at the media briefing.
In April, Hong Kong Stock Exchange made the biggest change to its initial public offering (IPO) rules in two decades by allowing technology firms that have shares with different voting rights to list in Hong Kong.