Opinion | HK poised to reach new heights in fintech innovation

By Dr Kevin Lau

Fintech means Finance plus Technology. By using technology to improve financial services and daily life habits, Fintech has developed rapidly in recent years. Fintech has many different meanings, generally covering the application of artificial intelligence, blockchain, compliance technology, financial management, big data, insurance, investment management, and market support. "Payme," launched by HSBC, and "Faster Payment System (FPS)," established by the HKMA, are innovative applications of financial technology that respond to the habits of the new generation. Technological innovation can improve the efficiency of financial products and services, reduce costs, and achieve economic effectiveness.

Fintech has been a critical development project in many countries recently. Hong Kong is an ideal place to expand the Fintech business as an international financial center with a highly digitized economy. In Hong Kong, especially for traditional banks, the demand for financial technology has increased dramatically. The reason is that virtual banks have been established one after another, and the image of products has become younger. They focus on "fast" and innovation. They are heavily invested in financial technology. Traditional banks still have a lot of room for improvement compared to the speed of virtual banks. The Hong Kong Monetary Authority is well-known in managing the entire Hong Kong financial system. Hong Kong has "one country, two systems," the "14th Five-Year Plan", the development of the Greater Bay Area, and the "Belt and Road" leading advantages and opportunities. It is also an important gateway to connect with the rest of the world; therefore there are many opportunities for technology companies to cooperate with banks, and more domestic and global companies will surely launch new virtual asset businesses in Hong Kong in the future.

The "Financial Technology 2025" strategy announced by the Hong Kong Monetary Authority in 2021 stated that it would encourage the financial industry to fully promote the digitalization of banks (All banks go Fintech) by 2025. In 2022, the entire financial industry have an obvious acceleration of innovation and technology. The HKMA stated that it would continue to support banks in full application of financial technology in their business operations, benefiting Hong Kong's people and the overall economy. The Financial Services and the Treasury Bureau attach great importance to the development of financial technology, and works closely with relevant government departments, financial regulatory agencies and the industry to develop into a major financial technology operation center in the Asia-Pacific region, and is committed to promoting the development of the financial technology industry in Hong Kong.

According to the Fraser Institute's Economic Freedom of the World 2022 Annual Report, Hong Kong has the freest economy in the world. Since the report was published in 1996, Hong Kong has been ranked first. Financial technology has a huge room for development. It is foreseen that the application of emerging technologies will penetrate small and large enterprises, and the gradual introduction of technological elements or intelligent application systems will bring a comprehensive impact. Professor Sun Dong, Secretary for Innovation, Technology and Industry, said that Hong Kong's two flagship innovation and technology institutions have made significant progress. Hong Kong is poised to reach new heights in fintech innovation.

The author, a radiologist, is a co-founder of the Hong Kong Coalition and a council member of the Chinese Young Entrepreneurs Association.

The views do not necessarily reflect those of DotDotNews.