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Fintech Brings Added Excitement for Hong Kong’s Innovation & Technology Sector

By Hong Kong Science and Technology Parks Corporation.

Hong Kong is acknowledged as one of Asia’s leading financial centres with a rich technological banking technological heritage. Yet, never has the excitement over Fintech and its applications in everyday life been felt this strong until recent times.

Investments are on a high, with Accenture recently reporting that Fintech deals have shown a 27% year-on-year increase in 2018, a positive sign of a maturing investment market. Hong Kong’s appetite for Fintech is equally strong too, with an adoption rate of 32%, according to EY’s Fintech Adoption Index. Development and adoption of AI, blockchains, cyber security, big data, e-payments, regtech and insurtech has been revolutionising the financial sector and creating new experiences for consumers and businesses alike.

Indeed, the measures and policies put in place by Hong Kong regulators has laid the groundwork for Fintech development and the city’s appeal as a global Fintech hub. HKSTP, as a statutory body for the Hong Kong government, has been building a robust and dynamic ecosystem for Fintech innovation over the years – bridging start-ups, investors, industries, financial institutions and academia. HKSTP offers various accelerator programmes and facilitate cross-sector collaborations. Currently, more than 50 park companies are specialised in Fintech, supported by over 100 more focusing on core technology research in AI, Blockchain, Cybersecurity and IoT.

These accelerator programmes, especially involving blockchains, have been showing solid results. One incubatee, partnering a consortium of insurance and healthcare professionals, recently launched a cloud-and-blockchain-based insurance claims platform for the healthcare sector. Another incubatee, in collaboration with The Hong Kong Federation of Insurers (HKFI), launched the first motor insurance platform in Asia using blockchain for verification of motor cover notes and policies.

The world’s first global diamonds trading platform was also recently launched in Hong Kong, developed by a HKSTP incubatee. EverCarat is a global marketplace for physically settled diamonds – where origin, ownership and transactions of diamonds are fully traceable and recorded by blockchain technology – and turning diamonds into tradeable assets, as easy as gold and currencies.

Hong Kong has recently granted four virtual banking licences, powered by Fintech and other emerging technologies, bringing yet another banking experience like no other. Soon, we can also expect having digital insurers and digital asset managers operating in Hong Kong. A consortium of 12 banks has started using a blockchain-based platform for trade finance – allowing easy sharing of trade documents, automating processes, and improving the overall trade finance processes.

Together with the Fast Payments System, implementation of Open APIs within the banking sector, new regtech and insurtech developments, 2019 is looking out to be a strong year for Hong Kong’s Fintech sector, even as the Greater Bay Area opportunities start to open up.