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Hong Kong goes all-in on fintech

Hong Kong goes all-in on fintech

The Hong Kong Monetary Authority (HKMA) is to establish a new Fintech Cross-Agency Co-ordination Group to formulate supportive policies for the local fintech ecosystem.

The formation of the group is one of a range of initiatives adopted by the central bank as part of its Fintech 2025 strategy plan.

All-told, the project encompasses local commercial banks, blockchain-based data sharing, talent supply and the central bank's own work in exploring the outer boundaries of digital currency creation.

In the latter case, the HKMA is to begin a study on a possible retail e-HK$ to understand its use cases, benefits, and related risks. The body is also continuing its collaboration with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a means of cross-boundary payments for both domestic and mainland residents.

Supporting ongoing innovation for the island territory's local banks, the HKMA intends to roll-out a Tech Baseline Assessment to take stock of banks’ current and planned adoption of fintech in the coming years, to identify fintech business areas or specific technology types which may be underdeveloped, and would benefit from HKMA support.

Part of this will entail the development of a next-generation data infrastructure which will take in Commercial Data Interchange, digital corporate identity, and DLT-based credit data sharing.

In addition, the HKMA will continue the preparatory work for the Hong Kong Growth Portfolio, which seeks to reinforce Hong Kong’s status as a financial, commercial and innovation centre. It will also enhance its Fintech Supervisory Sandbox and is exploring with the Innovation and Technology Commission the possibility of providing funding support to qualified fintech projects.

To increase the supply of fintech talent, the HKMA aims to collaborate with various strategic partners to groom both students and practitioners through various initiatives, including developing fintech-specific training programmes and qualifications, as well as promoting joint projects between the industry and academia.

An example of such a scheme is the Industry Project Masters Network (IPMN) scheme, which will be piloted this September to provide internship opportunities to postgraduate students to work on banks’ fintech projects on federated learning and other artificial intelligence technologies.

HKMA chief Eddie Yue says: “Fintech is, without doubt, a key growth engine for the financial industry in the post-pandemic era, and now is the right time to double down on our efforts to grasp the opportunities. “Fintech 2025” sets out our vision in this regard. I urge all stakeholders to join forces with the HKMA. Together, we can take our city’s fintech ecosystem to new heights.”

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