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Hong Kong has taken a leap to develop in the fintech industry over the past decade. Yet, to win the vigorous competition, it is essential to have strong fundamental building blocks.
As the Covid-19 pandemic has changed consumer behavior, startups have been pushed to go beyond innovation and digital transformation. The rise of fintech is now coming into the limelight than ever for financial institutions. With well-developed information and communication technology, Hong Kong has ramped up its efforts and made its way to become an international fintech hub despite its small size.
Here are four reasons why Hong Kong stands out as a top fintech hub with its fintech development.
1. Nurturing ecosystem with friendly regulations
Over the past couple of years, regulators in Hong Kong have propelled the fintech ecosystem by issuing some landmark regulations. The recent issuance of virtual banking licenses in Hong Kong has set a good example to neighboring countries such as Taiwan, encouraging them to jump on the fintech bandwagon.
Increasing implementation of payment methods like Faster Payments System and QR Code Payments has offered cash-free alternatives to the huge consumer base. Different fintech strategies are adopted to grow their banking businesses, and it is safe to say this diversity is what makes the Hong Kong fintech market so dynamic.
2. Abundant government funding
Besides progressive regulatory policies, Hong Kong’s government offers multiple grants to help startups establish, grow and expand. From R&D support, favorable tax deductions, waived fees and financial hiring assistance to offering matching funds for development, fundraising and even overseas expansion, Hong Kong offers unmatched opportunities for fintech innovation.
The Hong Kong government has taken initiative on boosting the development of fintech by launching an aggressive plan of setting aside $500 million HK to increase its competitiveness and support its financial services industry, fintech included. The Hong Kong government has also earmarked $10 million HK on the launching of the Fintech Proof-of-Concept Subsidy Scheme to provide “through-train” vetting and funding. The abundant provision of financial assistance enables fintech companies to check the box of capital and proceed with the expansion.
3. Diversified and matured talent pool
As one of the leading international financial centers, Hong Kong owns a deep pool of fintech and professional talents, including almost 200,000 experienced accounting, banking and asset management professionals. The Hong Kong government takes a supportive and proactive stance towards fintech and continues to focus on nurturing talents in the industry. To expand the local fintech talent pool, the Hong Kong Monetary Authority launched the Fintech Career Accelerator Scheme, attracting new blood to the fintech industry as well as talents outside of Hong Kong.
4. Well-positioned as a gateway to China
Apart from the rising regional fintech power, Hong Kong enjoys the geographical advantage with easy access to the China market and the ASEAN region when entering a new era of finance.
The Greater Bay Area is marked to be a magnet for worldwide talent and innovation. The launch of Global Fast Track 2021 not only provides more fintech scaling opportunities in Hong Kong but also in China and the rest of the world.
The future of fintech is looking bright. Hong Kong could maximize its benefits by better structuring the regulatory framework and strengthening consumer data protection. With the dare-to-try spirit, I believe that Hong Kong has a promising future for fintech.