Embracing innovation, Hong Kong's fintech development in fast lane

HONG KONG, Nov. 1 (Xinhua) -- Finnish entrepreneur Jarno Piironen was surprised to find a booming fintech scene in Hong Kong. For the past week, he attended several fintech and venture capital-themed events in Hong Kong, during which he connected with potential clients and investors for his Finland-based fintech startup.

"I always know Hong Kong as an international financial center, but I didn't know there is such a big fintech scene here," he told Xinhua during the ongoing 2022 Hong Kong Fintech Week, taking place in person and virtually from Monday to Friday.

The event is attracting the attention of international investors and entrepreneurs. As an international financial center, Hong Kong is actively embracing technological innovation in the financial industry with open-mindedness and an updated regulatory framework, thereby further consolidating its financial hub status while creating new growth drivers.

Paul Chan, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, said in a video address to the event that Hong Kong had no more than 180 fintech companies five years ago, but the number rose to more than 800 as of today.

"Many of them are founded by overseas talents, from Israel, France, the United Kingdom and many other places. And we ought to be proud that our fintech sector also gave birth to a number of unicorns," he said.

The impressive growth has been powered by Hong Kong's open market, a rigorous regulatory regime, the rule of law, sophisticated infrastructure and the free flow of capital and information, he said.

Building on the already flourishing fintech scene is the HKSAR government's latest open stance towards the development of virtual assets in Hong Kong.

The HKSAR government on Monday issued a policy statement on the development of virtual assets (VA) in Hong Kong, saying that Hong Kong is open and inclusive towards the global community of innovators engaging in VA businesses.

The HKSAR government would work with the financial regulators to provide a facilitating environment for promoting sustainable and responsible development of the VA sector in Hong Kong, the statement said.

"We will put in place timely and necessary guardrails to mitigate actual and potential risks in line with international standards, so that virtual assets innovations can thrive in Hong Kong in a sustainable manner," it said.

Adrian Cheng, chief executive officer of New World Development Company Limited, said that Hong Kong sees three major opportunities, including the possibility to become the digital financial asset issuance center, the chance to create a comprehensive ecosystem combining traditional and digital finance as well as the opportunity to cultivate a cross-border platform for blockchain development in the Guangdong-Hong Kong-Macao Greater Bay Area.

Hong Kong's unique advantage of being backed by the motherland and connected to the world also has a role to play in fintech development. Federico Fontolan, who leads digital innovation at CRIF Hong Kong, a business information provider, said that the Italy-based company chose Hong Kong as its regional headquarters partly because of Hong Kong's proximity to the Chinese mainland.

"Here you have access to innovations from all over the world, and as China is one of our biggest markets, it's always nice to be close to our customers," he said.

Financial regulators from the Chinese mainland are also stepping up support for Hong Kong's fintech development.

Yi Gang, China's central bank governor, said in his video address to the Hong Kong Fintech Week that the People's Bank of China is cooperating with the Hong Kong Monetary Authority and other monetary authorities on the Central Bank Digital Currency, or CBDC, as it attracted growing attention in recent years.

"We hope such cooperation will better serve both global and domestic investors and help enhance Hong Kong's role as an international financial center," he said.

Cai Jianchun, general manager of the Shanghai Stock Exchange, said that the exchange will leverage its experience and advantages in the coordinated development of fintech and the capital market to deepen its cooperation with Hong Kong and help consolidate Hong Kong's status as an international financial hub.