FinTech started gaining traction a decade ago, with its evolution taking on a new dimension after the 2008 global financial crisis. It allows entrepreneurs to disrupt the traditional financial sector and solve many of the long-time issues.
Apart from the United States, other open economies like the UK and Singapore, and even the somewhat more conservative Australia, all are now keen to promote the FinTech industry.
Closer home, China has taken a huge leap forward in FinTech in the last couple of years, helped by its scale of population and well-developed mobile payment infrastructure. The country is already at the forefront of global FinTech industry.
By contrast, Hong Kong had adopted a close-door policy after it rode through several financial crises. The city has been focused on preventing financial risk rather than on keeping up with the global FinTech trend.
The territory’s new leader, Carrie Lam, has said that she wants Hong Kong to catch up, but the task is not easy, given that it’s difficult to change the mindset of government officials, who have become used to playing safe since the city’s handover to China in 1997.
There had been talk that Hong Kong could launch some initiatives and move into the big data era within two years. But any single big data project without sufficient support might become another white elephant.
Surprisingly, financial officials, rather than traditional financial institutions, are those most against developing FinTech in this digital era.
FinTech has proved to be successful in many financial applications. Regulators should be wise and go with the trend rather than spend a lot of resources on suppressing FinTech’s development.
What Hong Kong should do is stick to the laissez-faire stance, which will help attract top talents from around the world to set up their bases here and serve the global market.
But things do not look promising so far. It’s in fact quite worrying to see that policymakers are just talking about relaxing regulations, without creating enough incentive for lower-level officials to follow through on the execution level.
What we need is a trans-department project management system that will ensure proper support for development of FinTech, open data, sharing economy, eHealth, blockchain and AI.
This article appeared in the Hong Kong Economic Journal on Oct 26
Translation by Julie Zhu with additional reporting
[Chinese version 中文版]
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