Hong Kong Towards a Leading Global FinTech Hub

44 45 Government Support Part I: Examination of Seven Fintech Hubs - 2016: A four-year plan entitled Research Innovation and Enterprise 2020 Plan was published - 2017: Financial Services Industry Transformation Map (ITM) was launched, which is a strategic plan for the sector after months of deliberations between the industry and the Monetary Authority of Singapore (MAS) - 2015: The legislative foundation for internet finance business "Guiding Opinions on Promoting the Sound Development of Internet Finance" was published - 2018: "A financial reform roadmap in the Measures on Facilitation the Further Opening-up of Banking and Insurance Sectors was established - 2019: 11 measures were announced and three-year FinTech Development Plan was released - 2021: The "four beams and eight pillars" for China's fintech development will be establised and improved; Six key tasks and priorities for strengthening the capability of fintech applications and the reglution of technology-driven innovations will be outlined The Government’s Role in the Evolution of Fintech Our observations so far have pointed to London and Singapore as solid examples of where a government has balanced regulation with highly positive engagement with the sector. The regulatory environments of London and Singapore have been key to the development of both hubs’ fintech sectors. On the other hand, the US is by far the most uncoordinated because of the fragmented policy structures set up by cities, states, and the federal government. London and Singapore have been adopting similar approaches in terms of regulating the fintech industry and offering public funding and other support schemes for the industry. The countries of both hubs demonstrate positive attitudes towards incorporating fintech into their national plans. Both hubs have a central agency – FCA for London and MAS for Singapore – to take the lead in working with the fintech sector. The FCA set up Project Innovate in 2014 to support innovation in financial services. Over the years, FCA has enhanced their regulation framework and government support in response to the industry’s demands. We find that many of the key proposals provided in FCA’s “Project Innovate: Call for input – Feedback Statement” 116 published in October 2014 have been addressed and implemented in FCA’s work. One interesting example is that comments on the inadequacy of FCA’s website, led to the FCA revamping it and turning it into one of the most informational and user-friendly websites among the hubs, with easy-to-find, clear, and comprehensive fintech-related information and resources. The MAS website also provides clear and comprehensive fintech information and resources. Being the sole regulator in Singapore has given some advantages to MAS with its integrated approach. It has been proactive in pursuing regulatory cooperation and facilitating collaboration on both within-border and cross-border fintech activities. Being the first two countries who adopted regulatory sandboxes, London and Singapore were also the first pair to enter into a “fintech bridge” agreement to encourage information-sharing and help fintech firms expand into each other’s markets. Despite the US layered governing structure making it difficult for the different levels of government to effectively provide targeted support, US regulators show strong commitment to foster fintech development. The governments of New York and San Francisco have initiated different schemes to support the industry. For example, the New York State Department of Financial Services (NYDFS) piloted the program Project Whitewall to support insurtech innovators seeking regulatory guidance. Following Project Whitewall, FastForward was launched 117 in June 2020 to support innovation in financial services. Meanwhile, San Francisco has also planned a program 118 for fintech companies to work with regulators on products and services. The government undoubtedly has a leading role in determining the direction of fintech industry development. The nature of fintech with its technology-driven innovation poses difficulties to regulators because financial services are inherently a heavily regulated industry. Thus, regulators have the delicate task of striking a balance between regulating financial services while not hindering the development of fintech innovation. Frequent engagement and collaboration with the industry helps regulators encourage growth, build trust, and manage risks, all while supporting the industry. 116. Financial Conduct Authority (FCA). | Project Innovate: Call for input Feedback Statement (Oct 2014). | https:// www.fca.org.uk/publication/feedback/fs-14-2.pdf 117. New York State, Department of Financial Services: Program to drive innovation financial services and products for new yorkers in the covid-19 era (Jun, 2020). | https://www.dfs.ny.gov/reports_and_publications/press_ releases/pr202006091 118. Bloomberg Law. | California Aims to Foster Fintech Innovation. Don’t Say Sandbox (1) (Jan 2020). | https://news. bloomberglaw.com/banking-law/california-aims-to-foster-fintech-innovation-dont-say-sandbox The Vital Role of Government Support Government support is an enabler of the growth and stability of a healthy fintech industry. Fintech-specific grants and funding opportunities should be readily available to encourage innovation. Making it easy to apply for grants can only help people bring their ideas to fruition. The presence of sandbox programs and similar initiatives to provide a safe environment for pilot trials is also essential for promoting innovation. By actively engaging with industry practitioners, a government can better understand industry needs and help foster a collaborative culture in fintech R&D, and by taking a proactive approach in making short-, medium-, and long-term plans, a government can provide not only stability, but an enhanced environment for the growth and development of the fintech. [ Exhibit 13 ] : Fintech Development Plans of the Asian Hubs - 2016: Fintech was officially designated as a promising growth area in it's Japan Revitalization Strategy 2016 with modification on related regulations to promote long-term growth of the sector - 2017: "Global Financial City: Tokyo" Vision was set out by Tokyo Metropolitan Govenment and initiatives that revitalize the Japanese financial sector in order to re-bulid Tokyo into the top global financial city in Asia - 2019: The accelerator program "FinTech Business Camp Tokyo" was launched by Tokyo Metropolitan Government - 2020: "FinTech Program: Asia meets Tokyo" started accepting applications, 52 companies from nine countries or regions in Asia have applied