On 8 June 2021, the Hong Kong Monetary Authority (HKMA) unveiled “Fintech 2025”, a new strategy aiming to drive fintech development in Hong Kong. In essence, “Fintech 2025” seeks to encourage the financial sector to adopt technology in their businesses and transactions comprehensively by 2025 by focusing on the following five key areas:
1. All banks go fintech
All banks are encouraged fully to digitalise their operations from front-end to back-end by 2025. Assessment of banks’ current and planned fintech adoption will be carried out from time to time to identify key fintech business areas or technologies that are underdeveloped.
2. Future-proofing for Central Bank Digital Currencies (CBDCs)
To get Hong Kong ready for CBDCs at both wholesale and retail levels, the HKMA will strengthen its research work on an e-Hong Kong Dollar (e-HKD) and e-Chinese Yuan (e-CNY) for cross-border payment applications.
3. Creating the next-generation data infrastructure
To prepare for the next generation of banking, the HKMA will be enhancing existing data infrastructure and building new ones, including Commercial Data Interchange (i.e. a consent-based financial infrastructure that would enable more secure and efficient data flow between banks and sources of commercial data), digital corporate identity, and distributed ledger-based credit data sharing platforms (i.e. a technology which supports networks of databases that enable participants to create, disseminate and store credit data without necessarily being controlled and administrated by a central party, in other words, “blockchain” technology).
4. Expanding a fintech-savvy workforce
The HKMA will nurture all-round fintech talent by developing training programmes and qualifications as well as promoting joint projects between the industry and academia.
5. Nurturing Ecosystems with funding and policies
The HKMA will be establishing a new Fintech Cross-Agency Co-ordination Group to formulate supportive policies for the fintech ecosystem. The HKMA has also joined forces with the Innovation and Technology Commission to provide funding support to qualified fintech projects. The Innovation and Technology Commission is an organ under the Hong Kong Government’s Innovation and Technology Bureau whose main mission is to provide software and hardware support for key government institutions and to collaborate on R&D and innovation activities.
For more information, please see: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2021/06/20210608-4/.
Mr Eddie Yue, Chief Executive of the HKMA, said, “Fintech is, without doubt, a key growth engine for the financial industry in the post-pandemic era, and now is the right time to double down on our efforts to grasp the opportunities. “Fintech 2025” sets out our vision in this regard. I urge all stakeholders to join forces with the HKMA. Together, we can take our city’s fintech ecosystem to new heights.”