Source: Financial Services Development Council
The Financial Services Development Council (FSDC) today (May 9) released two research reports to promote the further development and application of financial technology (FinTech) in Hong Kong.
The report, entitled “The Future of FinTech in Hong Kong” (the FinTech Report), examines the development of FinTech in different jurisdictions and provides recommendations on how Hong Kong could better embrace these technologies. As distributed ledger technology (DLT) is one of the major development clusters in FinTech, a subset to the FinTech Report entitled “Hong Kong - Building Trust Using Distributed Ledger Technology” (the DLT Report) sets out more specifically the actionable items that Hong Kong could consider in the spectrum of DLT, including blockchain.
The financial services industry in Hong Kong is entering a new era amid dramatic advances in technology. The Chairman of the FSDC, Mrs Laura M Cha, said, “Hong Kong has a world-class financial sector, but only a nascent FinTech and DLT sector. In the furtherance of the financial sector in the long run, Hong Kong should develop these technologies on par with its mainstream finance.
“As the global FinTech and DLT ecology is maturing, Hong Kong needs to catch up in the race and demonstrate to local and international FinTech firms that Hong Kong offers opportunities for developing their businesses. The two reports set out both the broad directions and the focused areas to build a thriving FinTech sector.”
The FinTech Report analyses Hong Kong’s FinTech positioning in comparison with a number of other jurisdictions that are also keen on developing the FinTech sector. The report also outlines an overall FinTech strategy, covering the nature, present status, issues and barriers, as well as concrete recommendations, for enhancing the further development of the FinTech sector in Hong Kong. These recommendations can be grouped under five key areas, namely cybersecurity, payments and securities settlement, digital identity and know-your-customer utility, wealth technology and insurance technology, and regulatory technology.
The DLT Report gives an account of the benefits and challenges brought about by DLT for the financial services industry. With reference to the experience of overseas jurisdictions, the report suggests that the Government and the financial services industry should leverage Hong Kong strengths in DLT using a four-pronged approach which involves establishing a leadership function within government, establishing a hub or focal point for the DLT community, embracing digital currency development, and stepping up the commissioning of DLT-based proofs of concept.