The Hong Kong Monetary Authority is establishing a financial-technology hub and adopting a regulatory “sandbox” to allow faster trials of products and applications as it tries to turn around a perception that it’s lagging behind other cities in stoking innovation. “Industry players, such as banks, payment service providers, fintech start-ups, the HKMA, etc. can get together at this facility to brainstorm innovative ideas, try out and evaluate new fintech solutions, conduct proof-of-concept trials, and gain an early understanding of the general applicability of creative solutions for banking and payment services”.
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“Sandboxes” typically afford fintech firms special regulatory waivers for a limited period of time.
The Hong Kong Monetary Authority (HKMA) is to set up a fintech innovation hub and supervisory “sandbox” for financial technology innovation in the banking sector, according to a statement issued by the watchdog today.
Raymond Chan, executive director of banking supervision at the HKMA, told reporters the new regime was valid as of September 6, adding that it would only apply to banks looking to use fintech, not to standalone fintech firms.
Despite a government push to promote Hong Kong as a fintech centre, critics say the semi-autonomous Chinese territory has been slow to accommodate fintech firms, whose capital-light, online-focused business models struggle to satisfy traditional licensing requirements.
In his keynote address to the Summit, the Chief Executive of the HKMA, Mr Norman Chan, shared his view on what it takes to build a “Hong Kong Brand” for financial services. The urgency to prepare regulatory environments for fintech is growing as banks from HSBC Holdings Plc to Standard Chartered Plc begin offering digital services such as biometric authentication and as mobile-payment systems such as Apple Pay and AliPay are introduced around the region.
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Speakers at the Summit included the Deputy Chief Executive of the HKMA and Director of Infrastructure Financing Facilitation Office, Mr Eddie Yue; the Managing Director and Head of Investments, Chief Investment Office, Asia Pacific of JPMorgan Chase Bank, National Association, Mr Rayson Chung; and the Partner and Data and Analytics Consulting Leader of the PricewaterhouseCoopers China and Hong Kong, Mr Scott Likens.
