This document describes the Hong Kong FinTech landscape, approaching the analysis from a FinTech, regulatory, Investment and talent standpoint. This document serves as a snapshot of the key pillars of a FinTech ecosystem in a country and provides a good overall view of the state of FinTech at a glance. Hong Kong is home to more than 150 international and local banks. With an abundance of local and international talent in finance, entrepreneurship and STEM, added together with the regulator’s comprehensive initiatives in all subsectors of FinTech, Hong Kong has the suitable ingredients for FinTech enterprises to succeed. Most China-based well-established FinTech players like Alipay, ZhongAn and Ping An have used Hong Kong as a stepping stone to their international expansion. On the other hand, Hong Kong has also recently seen the entry of other international FinTech players such as Revolut, Square and Transferwise. Key Findings: - Hong Kong aims to leverage its traditional strength as a trade hub by joining hands with Singapore to develop the Global Trade Connectivity Network (GTCN). - Hong Kong has facilitated the distribution of innovative financial services offerings via initiatives such as Open API for the banking sector and Fast Track for the insurance sector. - As of March 2018, Hong Kong hosts over 130 FinTechs operating in a wide range of areas including Financial Software and Service, Financial Research and Data, Personal Finance and Payment, Digital Currency, Remittance & eWallet.   - Banks in Hong Kong have launched various initiatives to connect with FinTechs. In October 2016, HSBC and the Hong Kong Applied Science and Technology Research Institute (ASTRI) launched a research and development innovation laboratory.  - In June 2017, Industrial and Commercial Bank of China (Asia) Limited and the ASTRI announced the launch of ICBC (Asia)- ASTRI FinTech Innovation Laboratory to develop FinTech applications in banking. - Funding for FinTech is available from both private and public sources. Besides accelerators and incubators as well as VC/PEs, FinTechs can access the Cyberport Creative Micro Fund, which sponsors high potential digital tech start-up projects and business ideas with a HK$100,000 grant. - The Hong Kong government’s 2018 budget pledged to allocate HK$500 million to the development of financial services over the next five years, including FinTech. - In November 2017, Cyberport launched the Cyberport Investors Network, a platform that engages worldwide investors of leading venture capitalists, angel investors and private equity funds, to enhance the fundraising and deal-making capabilities of Cyberport start-ups. It comprises over 100 investors of different categories including angel, Pre-A and Post-A rounds.

1. Overview
Hong Kong is home to more than 150 international and local banks. With an abundance of local
and international talent in finance, entrepreneurship and STEM, added together with the
regulator’s comprehensive initiatives in all subsectors of FinTech, Hong Kong has the suitable
ingredients for FinTech enterprises to succeed. Most China-based well-established FinTech
players like Alipay, ZhongAn and Ping An have used Hong Kong as a stepping stone to their
international expansion. On the other hand, Hong Kong has also recently seen the entry of other
international FinTech players such as Revolut, Square and Transferwise.
FinTech Ecosystem
FinTechs
As of March 2018, Hong Kong hosts over 130 FinTechs operating in a wide range of areas
including Financial Software and Service, Financial Research and Data, Personal Finance and
Payment, Digital Currency, Remittance & eWallet.
Banks in Hong Kong have launched various initiatives to connect with FinTechs. In October
2016, HSBC and the Hong Kong Applied Science and Technology Research Institute (ASTRI)
launched a research and development innovation laboratory.
In June 2017, Industrial and Commercial Bank of China (Asia) Limited and the ASTRI announced
the launch of ICBC (Asia)- ASTRI FinTech Innovation Laboratory to develop FinTech applications
in banking.
Regulators
Relevant regulators to FinTech in Hong Kong are the Hong Kong Monetary Authority (HKMA),
which is responsible for maintaining monetary and banking stability,the Insurance Authority (IA),
which regulates and supervises the insurance industry, and the Securities & Futures Commission
of Hong Kong (SFC), which regulate Hong Kong's securities and futures markets.
The financial regulators have taken a broad range of initiatives to bring clarity to the operations of
FinTech. In March 2016, Hong Kong Monetary Authority (HKMA) established FinTech Facilitation
Office (FFO) with the aim to facilitate the development of the FinTech ecosystem in Hong Kong
and to promote Hong Kong as a FinTech hub in Asia.
In September 2016, the HKMA launched the FinTech Supervisory Sandbox (FSS). As of the end
of August 2018, 36 products had been tested in the sandbox. Out of these cases, 26 pilot trials
have been completed, and the products have subsequently been rolled out. Separately, banks
have collaborated with tech firms in 18 trial cases.
Regarding the different areas of FinTech, in September 2017, the HKMA announced its intention
to encourage virtual banking in Hong Kong. In May 2018, The HKMA published a revised
Guideline on Authorization of Virtual Banks.
In July 2018, the HKMA launched the draft Open API framework, which laid out expectations on
how banks should deploy Open API, set out timelines for institutions to follow and made
recommendations on specific protocols and data formats.
In September 2018, HKMA launched the Faster Payment System (FPS). Both banks and stored
value facilities (“SVF”) in Hong Kong may participate in the FPS, which enables their customers
to make cross-bank/SVF payments in HKD and RMB by entering the mobile phone number or
the email address of the recipient, with funds available to the recipient almost immediately.
Toronto
► Digital payments
► Cryptocurrencies
► Robo-advisors
F O C U S
Industry
Association
► Fintech Association of
Hong Kong
Hong Kong

2. On the same day, the HKMA also launched the mobile application HKQR for the Hong
Kong Common QR Code, converts several QR codes into a single one at the same
time.
Following a consultation in May 2017, the SFC issued a guideline that provide guidance
on the design and operation of online platforms (including robo-advisory), suitability
requirements and defining complex products for clients.
In September 2017, the IA introduced “Fast Track”, a pilot scheme that will expedite the
authorization process of Insurtech companies that solely use digital channels for
distribution by giving them a dedicated queue for new authorization application.
In December 2017, the Monetary Authority of Singapore (MAS) and HKMA signed a
Memorandum of Understanding (MoU) to jointly develop the Global Trade Connectivity
Network (GTCN) with an objective to build an information highway using distributed
ledger technology (DLT) between the National Trade Platform in Singapore and the
Hong Kong Trade Finance Platform. The initiative, which involves 21 banks, was
expected to decrease transaction time from around two weeks to just a single day.
In August 2018, the HKMA in collaboration with 11 financial regulators and related
organisations, launched the Global Financial Innovation Network (GFIN) to create an
efficient way for innovative firms to interact with regulators.
Investors
Funding for FinTech is available from both private and public sources. Besides
accelerators and incubators as well as VC/PEs, FinTechs can access the Cyberport
Creative Micro Fund, which sponsors high potential digital tech start-up projects and
business ideas with a HK$100,000 grant.
The Hong Kong government’s 2018 budget pledged to allocate HK$500 million to the
development of financial services over the next five years, including FinTech.
In November 2017, Cyberport launched the Cyberport Investors Network, a platform
that engages worldwide investors of leading venture capitalists, angel investors and
private equity funds, to enhance the fundraising and deal-making capabilities of
Cyberport start-ups. It comprises over 100 investors of different categories including
angel, Pre-A and Post-A rounds.
Talent
The government and the financial regulator have launched comprehensive initiatives to
nurture local talent as well as attract overseas talent.
In July 2017, the HKMA, in partnership with ASTRI, launched the FinTech Career
Accelerator Scheme (FCAS) providing internship to undergraduates and postgraduate
students in the FinTech industry. At the time of the launch, the program had 12
participating banks and 10 participating tertiary institutions.
In November 2016, the HKMA partnered with ASTRI to establish HKMA-ASTRI
FinTech Innovation Hub to experiment and evaluate new FinTech solutions and
conduct proof-of-concept (PoC) trials.
In the 2016/17 school year, the Government provided a one-off subsidy of US$25,725
(HK$200,000) to each secondary school to support their STEM activities and projects.
In May 2018, the Government launched Technology Talent Admission Scheme
(TechTAS) to meet the demand for talent in the innovation and technology sector. The
scheme provides fast-track arrangement for eligible technology companies to admit
foreign tech talents to do R&D work for them in Hong Kong.
Key takeaways
► Hong Kong has facilitated the distribution of innovative financial services
offerings via initiatives such as Open API for the banking sector and Fast
Track for the insurance sector.
VC/PE in the region
► 1823 Ventures
► 500 Startups
► Alacrity Capital
► Alibaba Entrepreneurs
Fund
► Arbor Ventures
► Bigcolors
► Ce Yuan Ventures
► Click Ventures
► CoCoon Ignite
Ventures
► CV Ventures
► Hong Kong aims to leverage its traditional strength as a trade hub by
joining hands with Singapore to develop the Global Trade Connectivity
Network (GTCN). Varun Mittal
Global Emerging Markets
FinTech lead
varun.mittal@sg.ey.com
Contact us
www.ey.com/sg/FinTechHub
FinTech Hub