The Hong Kong Monetary Authority (HKMA) has unveiled a new strategy for driving FinTech development in Hong Kong.
According to HKMA, the FinTech 2025 strategy aims to encourage the financial sector to adopt technology comprehensively by 2025 as well as promoting the delivery of fair and efficient services for the benefit of Hong Kong’s citizens and its economy.
The program intends to specialise in five specific focus areas to develop FinTech in Hong Kong. The first focus includes promoting the all-around adoption of FinTech by the country’s banks and encouraging them to fully digitalise their operations from front to back end.
To move this forward, the HKMA claims it intends to introduce a Tech Baseline Assessment to get an idea of banks’ current and planned adoption of FinTech in the years ahead. The authority said it intends to do this to identify FinTech business areas or specific technology types that may be undeveloped and require HKMA support and will also issue supervisory guidance to help facilitate the uptake of novel technologies.
The second step of the 2025 strategy includes future-proofing the country for Central Bank Digital Currencies (CBDCS). This step will aim to bolster the organisations’ research work to increase the country’s readiness in issuing CBDCs. The HKMA highlighted in will begin a study on e-Hong Kong dollar to understand its potential uses, benefits and risks.
The authority added on this point that it intends to continue its collaboration with the People’s Bank of China in supporting the testing of a digital yen in Hong Kong, with a view to offering a useful means of cross-boundary payments for both domestic and mainland residents.
Thirdly, the HKMA will seek to create ‘next-generation’ data infrastructure. This includes strengthening the city’s data infrastructure and building news ones such as digital corporate identity, a DLT-based credit sharing platform and commercial data interchange to help ‘unleash Hong Kong’s potential for the next generation of banking’.
The HKMA will also look to expand the country’s workforce in the areas of FinTech by collaborating with a range of partners to support the growth of FinTech talent through various initiatives and training programs.
The final step in the strategy will include the HKMA creating a new Fintech Cross-Agency Co-ordination Group to create supportive policies for the Hong Kong FinTech market. It will also continue its work on developing the Hong Kong Growth Portfolio – a program that ‘seeks to reinforce Hong Kong’s status as a financial, commercial and innovation centre’. Finally, it is additionally looking at the possibility of being able to provide funding support to ‘qualified FinTech projects’.
The HKMA stated that further details of the initiatives under the Fintech 2025 strategy will be announced in due course.
Copyright © 2021 RegTech Analyst
Copyright © 2018 RegTech Analyst