Hong Kong and Singapore, which have vied for supremacy as financial technology hubs over the past couple of years, have now decided to join forces.
The cities’ central banks have signed a fintech cooperation agreement that will foster collaboration on business referrals, joint innovation projects, information sharing and the exchange of expertise, Norman Chan, chief executive of the Hong Kong Monetary Authority said Wednesday. The first joint project will be on trade finance, Chan said in a speech to open the HKMA Fintech Day.
Financial technology has added a new dimension to the decades-old tussle between Singapore and Hong Kong for the position as Asia’s premier financial centre, with both cities throwing hundreds of millions of dollars to help fund startups and build ecosystems conducive to innovation.
“Traditionally as a financial centre, there’s that comparison between Singapore and Hong Kong,” Roy Teo, head of the Monetary Authority of Singapore’s Financial Centre Development Department, said in a panel discussion at the event. “But when it comes to fintech, this is where we recognise that there’s a lot of need for collaboration between the regulators.”
The HKMA event is part of the Hong Kong Fintech Week, which organisers say is expected to attract more than 3,000 executives. Singapore holds its fintech festival on November 13-17. Last year, both cities held similar conferences within a week of each other.
Chan said the regulators were in talks on cross-border infrastructure to connect the Hong Kong Trade Finance Platform with a similar structure in the Southeast Asian city. Seven banks in Hong Kong have signed on to the HKTFP – an HKMA-led initiative based on distributed-ledger technology – to digitise and share trade documents, automate processes and reduce risks and fraud, Chan said. He didn’t name the banks.
“Technology is a game changer for the future of banking and payment services,” Chan said. “It will differentiate winners from losers.”
Fintech investments in Asia are poised to set a fresh record this year, according to a CB Insights report released this month. Venture capital-backed startups raised more than five billion dollars in 2017 through September, closing in on last year’s 6.3 billion dollars, data from the research firm show.Hong Kong Chief Executive Carrie Lam pledged several initiatives to boost the city’s innovation and technology sector in her policy address this month, including HK$2 billion (256 million dollars) to co-invest with venture capital funds in local technology startups.
Chan also unveiled fintech initiatives with the Office of Financial Development Service of Shenzhen in southern China, including a talent development program and a HK$7 million award for the development of “outstanding fintech products and solutions” for financial institutions in both cities.