Hong Kong is lagging behind Singapore in financial technology (FinTech) development due to the lack of a proper regulatory framework for the sector, an expert said.
Though authorities have begun to step up focus on the industry, more needs to be done if the city is to enhance its competitiveness as an innovative financial hub, said Ian Wood, a partner at London-based law firm Simmons & Simmons.
“We have seen a number of jurisdictions such as Singapore and UK embrace an open attitude towards FinTech,” Wood said in a media briefing in Hong Kong last week.
Apart from establishing committees to support FinTech, Singapore and British governments have experimented with a “sandbox” model in order to provide FinTech startups a more flexible environment in development of products and services, he said.
The “sandbox” allows technology companies to develop their ideas without worrying about regulatory matters, Wood said.
While Hong Kong has fallen behind, it’s not too late for the city to catch up, he said.
The UK has been drafting a scheme that requires banks to refer rejected borrowers to alternative financiers such as peer-to-peer lenders.
Such mechanism will prove to be a big help to individual FinTech startups, said Wood, who is an expert on regulatory issues.
Hong Kong’s FinTech startups should work closely with large banks, he suggested.
That can ensure flexibility, agility and innovation for the startups, while leveraging the financial resources of large banks, Wood said.
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