Hong Kong Towards a Leading Global FinTech Hub

52 53 Business Environment Part I: Examination of Seven Fintech Hubs Fintech is more than a subsector in the UK. In 2019, the fintech adoption rate in the UK reached 71%, more than quadrupled from the 17% in 2015. 143 Across services in sustainable finance and cutting-edge technology, companies in the UK can easily access the global market. As the heart of the UK, London has the world’s highest concentration of financial and professional services firms, and over half of the traditional financial institutions set disruption at the core of their business strategies. 144 With its attractiveness to venture capital investment, London is ranked as the leading fintech hotspot on the 2020 Fintech Occupier Index. 145 Businesses in the UK can benefit from its rich talent pool, well-established business environment, and forward-looking regulations. 143. EY. | Global Fintech Adoption Index 2019 (2019). | https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/ topics/banking-and-capital-markets/ey-global-fintech-adoption-index.pdf 144. Department for International Trade, HM Treasury and Innovate Finance. | UK Fintech – State of the Nation. (Apr 2019). | https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/801277/UK-fintech-state-of-the-nation.pdf 145. https://www.statista.com/statistics/874579/leading-cities-for-fintech-europe/ 146. Fintechnews Switzerland. | Swiss Fintech Startups Raised CHF 360M in 2019: Swiss Venture Capital Report 2020 (Feb 2020). | https://fintechnews.ch/fintech/swiss-fintech-startups-raised-chf-360m-in-2019-swiss- venture-capital-report-2020/32989/ 147. Switzerland Global Enterprise. | Switzerland remains global innovation champion (Sep 2020). | https://www.s-ge. com/en/article/news/20203-ranking-global-innovation-index 148. WIPO. | Global Innovation Index 2020 (2020). | https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2020.pdf 149. INSEAD. | The Global Talent Competitiveness Index 2020: Global Talent in the Age of Artificial Intelligence (2020). | https://www.insead.edu/sites/default/files/assets/dept/globalindices/docs/GTCI-2020-report.pdf 150. Financial Secrecy Index indicates the standard of global secrecy and the scale of offshore financial activities of countries, which are highly related to financial flows or capital flight. For more details, please see Tax Justice Network. | Financial Secrecy Index - 2020 Results (2020). | https://fsi.taxjustice.net/en/introduction/fsi-results 151. Forbes. | The Forbes Fintech 50: The Most Innovative Fintech Companies In 2020 (Feb 2020). | https://www. forbes.com/fintech/2020/#34ff43724acd 152. Forbes. | Best States for Business 2019 - New York. | https://www.forbes.com/places/ny/?sh=5df806876a76 125 100 75 50 25 0 Index score London Berlin Paris Barcelona Manchester Madrid Dublin Stockholm Amsterdam Warsaw Munich Copenhagen Milan Budapest Prague Frankfurt Brussels Bucharest Vienna Lyon Lisbon Oslo Athens Rating of the Most Attractive Cities for Fintech Companies to be Located in Europe in 2020 Source: Statista | Ranking of most attractive cities for fintech companies to be located in Europe in 2020 (June, 2020). Additional Information: Europe; Savills; 2020 Note: 1. The Fintech Occupier Index ranks European cities within Savills European occupier network by their attractiveness to fintech occupiers to locate. 2. The index takes into consideration three main criteria: the demographics of the city, talent and innovation, affordability and business environment. [ Exhibit 16 ] : Ranking of Most Attractive Cities for Fintech Firms to be Located in Europe 2020 Zurich: Top in Innovation with a Quality Workforce Compared with London, Zurich’s market size is currently much smaller, but it has the potential to become a leading European fintech hub. In 2019, Swiss fintech startups raised CHF$360mn (US$400mn) through 39 deals, of which Zurich attracted the most fintech investments with close to 85% of funding in information and communication technologies (ICT) and fintech. 146 Switzerland has consistently achieved top rankings in international indexes for years, making it a destination for more than 850 multinational corporations (MNCs) to set up their regional headquarters. In 2020, it was crowned as No.1 in the World Intellectual Property Organization for the tenth consecutive year, 147 securing its reputation as a place for innovation. Top rankings in different global indexes demonstrate its high and sustainable innovation capability, the presence of a highly qualified pool of talent, a stable and efficient economic infrastructure, and a world - famous education system. It is one of the most effective places to transform innovation investment into results, with 62.75 points (average 20.74 points for surveyed countries) in “Innovation Output” on the Global Innovation Index. 148 Apart from having fertile soil for innovation, the high quality of life and working conditions makes the Greater Zurich Area an attractive place for top international talent. It has ranked first in the INSEAD Global Talent Competitiveness Index for a number of years, 149 another reason many MNCs choose to base their regional headquarters in Zurich. New York and San Francisco: Leading Global Financial Centers with Strong Start-up Cultures In 2020, the US had overtook Switzerland on the Financial Secrecy Index 150 and obtained high ranking in various indexes for its overall high competitiveness in innovation and ease of doing business. The US is famous for its vibrant entrepreneurial ecosystem and openness in its investment market. Both New York and San Francisco are home to some of the top US fintech companies. Since 2016, Forbes has been publishing a Fintech 50 list that highlights the private companies that are driving change in the fintech industry. The winning companies from New York and San Francisco already accounted for 38 spots of the 50. 151 Both cities benefit from the US government’s Research and Development Tax Credit , which gives a credit of up to 13% on spending on processes and products for all companies, including fintech. New York is the most populous city in the United States with 19.5 million people. As one of the leading global centers in banking, media, fashion and advertising, it dominates the economy of the country. The city has a well-educated labor force, a large VC investment market, and significant cultural and recreation resources. 10% of the 1,000 largest companies in New York State have set up headquarters in New York City. 152 Between