Government's backing 'key to making HK a global fintech hub'

Luo Weiteng

Government's backing 'key to making HK a global fintech hub'

Riding high on the undertakings and goals of making Hong Kong a world-leading fintech center, the sheer power of government support should come into focus and be valued, says former secretary for financial services and the treasury Ceajer Chan Ka-keung.

Chan, who joined local online lender WeLab as a senior adviser last year after stepping down from the government post he had held for a decade in 2017, said government support is crucial when there’s no market solution to the problems on the horizon.

“Unlike other sectors, the financial services industry — one of the key pillars of Hong Kong’s economy — is all about infrastructure and regulation. This calls for government support and a market force working hand in hand,” he told China Daily on the sidelines of the two-day Internet Economy Summit in Hong Kong on Tuesday.

Indicative of its determination to sharpen its edge as a go-to destination for promising global fintech companies, Hong Kong has rolled out a series of bold moves, including the introduction of the Faster Payment System (FPS) and virtual banks.

WeLab Digital — a unit of the home-grown fintech unicorn WeLab — secured the fourth virtual banking license granted by the Hong Kong Monetary Authority last week, and will be chaired by Chan.

Citing the FPS as “a wonderful example of how much government can do to change the technological landscape and enable innovation development in the market”, Chan said the market’s invisible hand is not the panacea for all the problems.

In a local payment market where there’s no dominant player, it’s scarcely impossible for different market players to reach a consensus. This is a frontier that government support could offer a magic wand.

“Clearly, government support is not a silver bullet for all the problems either. But, the HKMA — the city’s de facto central bank — has identified one of the difficulties in e-wallets gaining popularity in Hong Kong — people have no easy access to getting the payment and transfers done.”

“Instead of just sitting there and waiting for the market to come into play, which would never happen, the HKMA decided to start and build the fundamental infrastructure in a proactive manner,” Chan said.

Unswerving government support will pave the way for a prosperous home-grown market, which matters a lot in bolstering the SAR’s vision of leading the pack in fintech development. When it comes to placing Hong Kong’s fintech ambitions in a bigger context of the Guangdong-Hong Kong-Macao Greater Bay Area, the importance of government support cannot be over-exaggerated, Chan reckoned.

“Hailed as one of the most significant national development strategies, the Bay Area is an economically vibrant region in the world’s second-largest economy. Hong Kong is very much part of it,” he said.

As the nation charts the course of gradually opening up its gargantuan US$42-trillion financial sector, Chan said the key factor here is the national financial policy which defines how much financial services flow as seen from the Bay Area.

He believed financial technology itself is a prerequisite for the Bay Area’s finance. “Without fintech, we could barely talk about Bay Area finance. But one condition is far from enough. We need more conditions. This points to the national policy and government support, which “will set the stage for the further opening-up of the nation’s financial market.”