Date
14 December 2017
Welab founder Simon Loong suggests the government extend its regulatory sandbox scheme beyond the banking sector. Photo: HKEJ
Welab founder Simon Loong suggests the government extend its regulatory sandbox scheme beyond the banking sector. Photo: HKEJ

How to foster fintech development in Hong Kong

Since the government put emphasis on the development of financial technology in the 2015 budget, fintech’s importance has become more widely recognized, Simon Loong, Welab chief executive and co-founder, told the Hong Kong Economic Journal.

Start-ups raised about US$360 million between January 2014 and September 2016, with Welab accounting for about half of the amount.

When Loong decided to quit his banking job to start his own company in 2013, his colleagues had no idea what fintech was about.

But in 2015, he was getting calls from ex-colleagues asking about job vacancies. “The government should get some credit,” Loong said.

More has to be done. While Loong applauds the government’s regulatory sandbox approach that allows banks to try out new fintech products without the need to fully comply with standard supervisory requirements, he suggests the scheme be extended to outside the banking industry.

Quoting a Peat Marwick report, Loong points out that out of the top 100 financial start-ups, only two hold a banking license, so most of the innovation has come from outside the banking sector.

The regulatory framework also needs to be updated, Loong said.

Existing regulations were all formed before the emergence of technologies like the internet and block chain, so a change is necessary.

Meanwhile, start-ups are basically about upending the existing way of doing things and the role of regulatory bodies on fintech development has to be revisited, he said.

– Contact us at [email protected]

RT/RA

EJ Insight writer

EJI Weekly Newsletter

Please click here to unsubscribe