Fintech association urges govt support for local startups
Financial technology startups are calling on the Hong Kong SAR government to immediately launch measures to help the industry cope with the impact of the coronavirus outbreak, which is wreaking havoc on its cashflow and research efforts.
“These challenges particularly impact the startup and small and medium enterprise (SME) members of our fintech ecosystem that are the most vulnerable in times like these,” said Amand Tung, founding board member of FinTech Association of Hong Kong (FTAHK), a not-for-profit association representing over 350 industry players in the local and global fintech community.
“We have not heard of any staff layoffs or closures among our member companies yet, but it is possible to happen in the long run,” said Tung.
“Fintech industry players are expected to be forced to postpone, or even shelve, fundraising plans due to the coronavirus outbreak, as the first wave of impact over the industry, with smaller startups bearing the brunt [of the fallout].”
In a letter to the Secretary for Financial Services and the Treasury James Henry Lau Jr., the FTAHK asked the government to step up the funding approval process and relax the funding criteria for two programs under the Innovation and Technology Fund (ITF) and one under the Hong Kong Productivity Council, which support private sector R&D efforts.
In his budget last month, Financial Secretary Paul Chan Mo-po announced low-interest loans of up to HK$2 million for each SME with a 100 percent government guarantee.
While the government has yet to announce details such as application procedures and criteria, Tung said she hopes local fintech companies will benefit from the funding programs.
“On the positive side, the market recognizes the convenience of fintech amid the coronavirus outbreak,” Tung said.
“To some extent, the incident also highlights the importance for the government to put efforts in developing and promoting the fintech ecosystem in the city.”
She also told EJ Insight that financial institutions are increasingly adopting remote services, such as online or by phone, to minimize face-to-face contact between front-line staff and customers.
For example, DBS Bank, a member of the association, has launched a digital portal for multiple procedures for its trade financing service.
Andrew Eldon, HSBC's (00005.HK) head of digital, wealth and personal banking in Hong Kong, said the bank has recorded significant double-digit growth in the usage of its different digital channels, covering mobile and browser banking, FPS registrations and transactions, as well as PayMe P2M transactions, in the last two months, according to Tung.
The first batch of the eight licensed virtual banks will launch in the next three months. The FTAHK expects the new banking players will actively promote digital technology applications and bring changes to the traditional banking market.
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