Fintech Overview
- Wealthtech / Investech, Insurtech, and Greentech solutions hold considerable potential to provide the people of Hong Kong with enhanced accessibility, convenience, and personalisation, powered by AI and DLT.
While the financial services industry acknowledges the importance of Fintech and shows a keen interest in adopting Fintech solutions, overarching adoption challenges persist. This is especially true for users seeking new capabilities through third-party Fintech solution providers, which account for ~70% of the digital transformation efforts in Hong Kong’s financial institutions.
Major Roadblocks
- Sourcing: Limited dedicated resources pose a significant roadblock to optimal sourcing efforts, as identified by 77% of Fintech solution providers and 65% of Fintech users. Coupled with steep business development costs incurred by Fintech solution providers, as well as the perception of limited solution availability among Fintech users, the sourcing process becomes an uphill battle.
- Consideration / Negotiation: Misalignments between Fintech solution providers and users are leading to major compromises – and even breakdowns – in contracting agreements, with Fintech solution providers focusing on aspects considered relatively less important by users, potentially overlooking more critical factors such as deployment times. Moreover, misalignments around non-negotiable factors, such as indemnity / liability clauses, data rights, and IP rights, further complicate the negotiation process.
- Onboarding: Even when contractual agreements are finalised, many Fintech solution providers find it difficult to meet the onboarding requirements imposed by Fintech users, including providing third-party accreditations.
- Activation: Post-deployment activation is also being hindered by organisational inertia, a concern voiced by 55% of Fintech users and 90% of Fintech solution providers. This inertia frequently stems from a lack of user understanding and internal endorsement, emphasised by Fintech solution providers.
Fintech Promotion Roadmap
- In response to these challenges, the HKMA has unveiled a new Hong Kong Fintech Promotion Roadmap. Among the initiatives outlined in the roadmap are the transformation of the HKMA’s existing Regtech Knowledge Hub into a more comprehensive Fintech Knowledge Hub, a series of targeted events, and the publication of industry guidance and supporting research projects.
