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Hong Kong Unveils ‘Fintech 2025’ Strategy – Fintech Bitcoin News

The Hong Kong Monetary Authority (HKMA) plans to guide local banks towards full adoption of fintech technologies, a new strategy reveals. The sector’s central banking institution also insisted it was going to “walk the talk” by digitizing its supervision of financial institutions.

Hong Kong Central Bank to Support Fintech Development

Hong Kong’s monetary policy regulator has unveiled its new strategy to encourage fintech development in the Special Administrative Region of China. With the strategy, HKMA aims to see widespread adoption of new financial technologies over the next four years. The central bank also seeks to “promote the provision of fair and efficient financial services for the benefit of Hong Kong’s citizens and the economy.”

'All Banks Go Fintech': Hong Kong Unveils 'Fintech 2025' Strategy

Speaking at a seminar organized by the Hong Kong Association of Banks, HKMA Chief Executive Eddie Yu outlined the five focus areas of “Fintech 2025”. Regulator wants to encourage all banks to move to fintech, future-proof Hong Kong CBDC, creating next-gen data infrastructure, expanding the fintech-savvy workforce and nurturing the ecosystem with funding and policies.

One of the key directions in which the Monetary Authority intends to accelerate its efforts is the complete digitization of bank operations. Expanding on the achievements of its Smart Banking Era strategy announced in 2017, HKMA will continue to “promote the all-round adoption of fintech by Hong Kong banks”. The regulator is going to identify specific fintech areas where this sector is lagging and needs support. This also applies to its own regulatory framework:

The HKMA will issue further supervisory guidance to facilitate the adoption of new technologies and continue the “Chalti Baat” by digitizing its supervision of banks through the use of advanced technologies.

HKMA will work with stakeholders on implementation of ‘Fintech 2025’ strategy

The new strategy envisages augmenting and expanding the existing data infrastructure of the city. The Hong Kong Monetary Authority is planning to set up a credit data sharing platform and a commercial data interchange based on distributed ledger technology (DLT).

The central bank will work to increase the availability of fintech talent through new training programs and collaborations between industry and academia. One such initiative is the Industry Project Masters Network, a scheme that offers internships for postgraduate students to get involved in fintech projects at participating banks. The program starts in September.

'All Banks Go Fintech': Hong Kong Unveils 'Fintech 2025' Strategy

HKMA said it would join industry players in establishing a new fintech cross-agency coordination group, which would be tasked with formulating supportive policies for the fintech ecosystem. The Monetary Authority will enhance its fintech supervisory sandbox and provide funding for eligible fintech projects in partnership with the region’s Innovation and Technology Commission. HKMA CEO Eddie Yu emphasized:

Fintech is, undoubtedly, a major growth engine for the financial industry in the post-pandemic era, and now is the right time to redouble our efforts to seize the opportunities. “Fintech 2025” determines our approach in this regard. I urge all stakeholders to engage with HKMA.

The financial regulator intends to devote some of its efforts to increasing Hong Kong’s readiness to issue central bank digital currencies. HKMA is referring not only to the development of wholesale CBDCs but also to research into retail digital currencies. The financial institution will continue to support the People’s Bank of China digital yuan test (e-CNY) for cross-border payments, launching a separate study on the digital Hong Kong dollar (e-HKD).

Do you expect Hong Kong to become a global fintech hub? Let us know in the comments section below.

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