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Seven key takeaways from Hong Kong FinTech Week

Hong Kong FinTech Week 2020 drew thousands of participants from around the world, including 500 exhibitors, 350 speakers, 230 journalists and 29 delegates from more than 130 economies. Known as one of Asia’s most influential FinTech conferences, the show was held Nov. 2 to 4, 2020. The far-reaching agenda provided a holistic overview of Hong Kong’s local markets and pathway to the Asia Pacific region. This year, due to the pandemic, the conference was held entirely online.

Organizers used one of the most comprehensive online meeting platforms, leveraging AI to facilitate introductions among professionals from financial services and technology sectors, who could network and book one-on-one meetings.

Participants included entrepreneurs, investors, inventors, and industry leaders from across the FinTech ecosystem. The agenda provided high-quality content of interest to individuals and companies committed to FinTech industries or just curious about Asia business opportunities.

High-profile speakers included government officials, regulators and established industry executives. Given the diverse and rich contents of the conference, viewership is projected to reach to 1.2 million, a historic record. Following are seven key conference takeaways:

Humanizing FinTech is the theme of this year

FinTech must create solutions that comprehend and address life needs. In HK, seven virtual banks have officially launched services to the public; four virtual insurance have been authorized.

Government support is critical to growth

Government support is fostering growth in the HK FinTech ecosystem, with 600 fintech companies and eight unicorns in the region. Since the onset of the pandemic, a government-sponsored initiative will train new talent. The program is set to launch in July and will offer approximately 1,000 full-time positions.

Digital customer growth

According to Angel NG, the CEO of Citi HK and Macau, Since Pandemic, Citi’s digital customer base has substantially increased. “We have seen an increase in our digital active customer base, which is now at over 80% in our credit card business and, you know, online purchases now account for more than 40%of the total overall customer spending and virtual banking usage has been increased by 60%,” NG said.

NG additionally noted that FX transactions are conducted through digital channels, and mutual fund transaction volume has increased by 20% since Citi launched a mutual fund feature on its mobile app.

Customer experience is everything

Providing a customer-centric experience is key to competing. Everyone needs to meet customer expectations and doing so will create tons of opportunities for big and small players. Startup and big traditional banks have different strength to play in the field.

Additionally, numerous banks have introduced new digitized services and products. For instance, HSBC has introduced PayMe.

Virtual, traditional bank convergence

Virtual and traditional bank convergence will be here before we know it, with plenty of room for innovation on each side. For traditional banks, it’s very important to increase operational efficiencies. At Citi Bank, for example, the focus is on elimination, simplification, and automation.

Operational resilience is also very important, according to CEO of a leading bank in HK, because of the need for extra cash reserves in times of crisis. FinTechs play an important role because they focus on  specific solutions and usually have more expertise and greater insights in specific areas.

Incumbent traditional banks also need to be more open to partnerships and formalized joint ventures with FinTech players to apply for virtual banking licenses.

Hong Kong aims to lead Reg Tech by 2025

In terms of adoption, HK financial authority wants to ensure that Reg Tech will be extensively adopted by the Hong Kong banking sector in the next few years.

In order to promote Reg tech Adoption, the local regulator has developed a two-year roadmap to further address the needs in HK banking sectors and foster a more diverse, interactive RegTech ecosystem in Hong Kong. According to Arthur Yuen HK monetary authority, they can leverage RegTech solutions, improve quality and reduce costs for financial crime and transaction monitoring.

Conceptually, HK is trying to focus on three elements, the first is to lay out a common practice framework for implementing RegTech in HK. The second involves making practical recommendations for initiatives that can contribute to wide RegTech adoption. The third element is to deliver a practical roadmap of the HMS plans for promoting Regtech adoption.

Yuen provided great insights and opportunities for RegTech solution providers and professionals to oversee mature RegTech solution providers and collaborate to develop customized solutions that address HK local needs.

Embrace change

As the Greater Bay Area’s bridge for accessing mainland China and Southeast Asia markets, Hong Kong has an essential role to play in connecting Silicon Valley with the global FinTech ecosystem. To achieve their stated goals and maintain consistent year-over-year growth, Hong Kong FinTechs must be prepared for change and continue to cultivate local and international talent by promoting available career opportunities.

Author

Tracy Lai

FinTech Consultant

Partner at LYSTAR GROUP 

Tracy Lai provides strategic and business development solutions to executives, and entrepreneur. Her professional experience includes work at Fortune 500 companies including Intel and RBS, and startups. Her expertise covers business development, risk management, project management and investor relations, in Financial Services, FinTech, Innovation, Technology and Education. As management consultant and FinTech advisor, she holds multiple senior roles with focus on cross border and cross industry collaboration, including projects in US, Asia and Europe.