Hong Kong poised to advance to next phase of fintech strategy, de facto c-bank says

Hong Kong is poised to advance to the next phase of its fintech strategy as proactive steps have been taken to drive the banking sector towards a more innovative and resilient future, the city’s de facto central bank head said.

There are several key pillars solidifying the SAR’s position as a leading international financial center and propelling it further along its path of digital transformation, the Hong Kong Monetary Authority chief executive Eddie Yue Wai-man wrote in an article on its website.

The HKMA has led a series of efforts to encourage banks to adopt fintech across different areas and the “all banks go fintech” journey has achieved success through a blend of targeted initiatives and supervisory guidance, Yue said. 

The eight digital banks, which have rapidly expanded their customer base, particularly among younger users and small and medium-sized enterprises, have also prompted traditional banks to accelerate their own digital transformation efforts, he noted.

The eight lenders together had 3.4 million customers with HK$77 billion deposits and granted HK$29 billion loans as of June, the chief said. 

All retail banks in Hong Kong have now adopted Regtech, with overall adoption reaching 97 percent, up by 14 percent from 2022, he said, adding that a significant growth in adoption of g­reentech, wealthtech, insurtech, artificial intelligence and distributed ledger technology was also seen.

As many as 75 percent of surveyed banks have integrated AI into their operations, up from 59 percent in 2022, he said.

Meanwhile, over 25,000 professionals are now employed in Hong Kong’s fintech sector and there is also growing enthusiasm among the younger generation, reflected in the continuous expansion of fintech-related programs offered by local universities, Yue said.