HK picks up pace in data sharing

As part of a three-pronged strategy, Hong Kong government is planning to speed up the opening of data to foster the development of fintech.

In the latest initiative announced, Secretary for Financial Services & the Treasury Christopher Hui said the government is considering the sharing of data in the Companies Register to the Commercial Data Interchange (CDI), to make it more convenient for financial institutions to obtain reliable information on registered companies.

Hong Kong Monetary Authority is currently leading the charge to establish the CDI infrastructure. The de-facto central bank first brought out the idea a year ago.

Earlier this month, the HKMA udpated the CDI progress in Hong Kong Fintech Week 2021, noting the Proof-of-Concept study on the technical feasibiity has been completed, following the pilot launch, CDI is expected to officially launch by the end of 2022.

The project marks an extension of HKMA’s role from overseeing the secure movement of funds in the clearing and settlement systems to ensuring the secure movement of data, in order to support the banking sector in risk assessment, while enhancing borrowers’ access to financing at the same time.

Through the CDI platform, “customers can authorise their own service providers – such as utilities companies and payment gateways – to provide banks with relevant and authenticated data,” HKMA chief Eddie Yue explained previously. “With customers’ consent, banks can have direct, efficient access to a substantial body of data. That will enable them to perform more precise and objective credit assessments.”

Yue gave an example. “A family-run noodle shop which has problems getting bank credit can now choose to allow its bank to access historical turnover data from its point of sale terminals. With access to this data, and by using AI tools, the bank should be able to make an accurate forecast for the noodle shop’s sales. That means it can make a credit decision without having to first ask the owner for loan collateral. ”

Another type of SMEs, small importers and exporters might also benefit, Yue added. By authorising trade servicing platforms to share their trading data with banks, they can help their bankers understand their trade counterparties and better monitor money laundering risk, thus improving their access to financing.

“With CDI, our aim is to enable bank customers, particularly SMEs, to take more control of their own digital footprint, so that they can use their data to enhance their access to financial services,” Yue said.

Opening up of government data and the sharing of such data with financial institutions play a crucial part in the development of the CDI, Hui noted.

Data aside, Hui is also counting on improved policy coordination and more training programmes to support the fintech industry.

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