Fintech has become a common term in the business realms over the last couple of years. With this popularity, it is interesting that its meaning remains unclear. However, there is no doubt that Hong Kong is the global fintech leader.
What exactly is fintech? Why Fintech?
This is a term used to mean financial technology. It is mainly applied in business startups, but on a broader approach, it ropes financial institution and tech companies that are facilitating various financial services. With technology advancement, financial organizations were the first to adopt fintech.
However, this has changed, and every company wants to incorporate fintech systems in its operational infrastructure. The Fintech technology is crucial in helping businesses cut cost and operate more efficiently. No company wants to be left behind.
For example, Google introduced the Google Wallet, Apple has its ApplePay, and Tencent has the WeBank. This trend is expected to continue growing rapidly.
Hong Kong is the global leader in fintech
Hong Kong emergence as a top fintech hub is not a surprise. The city has consistently been ranked among the top 5 financial hubs in the globe by different surveys and top institutions such as World Economic Forum’s Financial Development Report.
In his view, Peter Diamandis of the highly regarded X Price Foundations and Singularity University posits that by 2020, 3-5 billion people will go online. The bulk of this number will mainly come from China and India. Now, the proximity of Hong Kong to both India and China places it at the forefront of becoming the fintech leader in the region.
Many companies in Hong Kong have started forming partnerships with banks to be at the front line as fintech unfolds. In their survey, the PWC 2nd Global FinTech survey established that over 82% of financial institutions are looking forward to forming partnerships with tech companies (check our SPV offer). While the tech companies would have been considered competitors for entering the finance sector, they are now looked at from the point or enhancing synergies. These partnerships are likely to catapult Hong Kong to an even more influential leader in Fintech not just in Asia, but globally too.
As businesses start seeing this reality, they have started positioning themselves in Hong Kong to take advantage and reap big. Such organizations include Accenture’s FinTech Innovation Lab, Fintech Hong Kong and the Asia’s largest startup competition called the Next Money Fintechfinals. It is also very important to point HKMA (Hong Kong Monetary Authority) that has established an office to facilitate fintech operations in the country as Hong Kong looks into the future.
What does the future hold?
The changes taking place in fintech technology are very rapid, and it is very difficult to predict with precision the actual direction in the coming days. This is very easy to point by looking closer at the fast transforming blockchain technology and Rebo-advisors in the market today.
Some advisors are also pointing that the technology is likely to go RegTech (Regulatory Technology). This means using the emerging technologies to address the compliance to set regulations more efficiently.