Partnership with FinTech firms as a win-win target
In their second Global FinTech Survey, PwC’s found that most of the Hong Kong financial institutions (80%) looked forward to partnering with FinTech firms as opposed to re-inventing them radically. It is only51% of institutions in Hong Kong that use the disruptive method compared the global and Chinese institutions that stand at 56% and 59% respectively.
The respondents during this survey demonstrated a pragmatic response to the various challenges that FinTech companies unleashed for financial institutions. Mathew Phillips, the PwC China and Hong Kong Financial Services Leader argued that financial services are targeting a win-win situation.
Financial institutions can move to the next level by importing culture via partnership. The momentum in building the FinTech space is encouraging and will level Hong Kong’s regional and global role in financial services.
Challenges for partnership with FinTech firms
Despite this enthusiastic finding, some issues were evident from the survey. About 60 of all respondents were worried about the regulatory uncertainty that could come with such arrangements. This concern is high compared to the global levels that stand at 54%. Over 70% and 42% of Hong Kong and Chinese respondents pointed that using FinTech companies can enhance info security and privacy threats.
Notably, 87% of respondents in Hong Kong expressed the fear that search for talents could become a problem. They argued that it will be an issue to get, hire and retain innovative people. However, this concern is higher compared to China, Singapore, and globally where 71%, 79%, and 80% felt that talents would be an issue respectively.
FinTech growth holds the key to making Hong Kong the regional leader
Despite the challenges, the survey notes some exciting chances in the Hong Kong FinTech sector. Henry Arslanian, the PwC China, and Hong Kong FinTech & RegTech pointed that most respondents demonstrated the strong interest in Robotic Process Automation. It can also help to keep cost low. This is a great opportunity for Hong Kong to reposition itself as a hub for services that can later be exported to other areas.
Even as FinTech as a solution to current regulatory and compliance burden, respondents in Hong Kong identify various applications for BlockChains. The core applications are for money transfer and payments. However, about 54% of Hong Kong respondents against the global 46% see huge potential for blockchain in digital identity management.
Phillips adds that financial services sector in Hong Kong is known for its large banks that can partner and even learn from various startups. The regulatory environment, as well as market size, is indeed favorable for such partnership. If Hong Kong nurtures these tech skills, it will gain ground as a market leader.
How you identify the right FinTech, select the best technology, and apply it a competitive advantage is crucial when working in Hong Kong and away. Do not make a mistake on tech application; contact us for assistance.