Local financial institutions are interested in increasing their cross-border investments in the next two to three years despite facing different regulations in the Greater Bay Area, a survey by the Hong Kong Academy of Finance has found.
The academy, under Hong Kong Monetary Authority, polled 58 institutions from banking, insurance, and asset management sectors between July to October 2022, on the cross-boundary payment and settlement practices within the GBA and their related challenges.
More than 90 percent of surveyed institutions agreed that cross-boundary payment and settlement channels are crucial for their activities in GBA.
The market participants were interested in boosting their cross-boundary investment in the coming two to three years as well.
The number of financial institutions in the Wealth Management Connect is expected to grow by 71 percent, and that of China Interbank Bond Market Direct by 65 percent.
But the number of participants in Stock Connect would rise only 33 percent in the coming few years.
Pascal Siu Yat-kui, a researcher at Our Hong Kong Foundation, says that the central bank's digital currency could shorten the time and reduce the cost of cross-border remittance settlements.
