Hong Kong Towards a Leading Global FinTech Hub

80 81 Part II: Key Observations, Policy Implications and Recommended Actions for Hong Kong Opportunity 1 Observation: Separate government departments and bureaus manage the various fintech communities and their issues, thus making it difficult to provide centralized policies and information to facilitate collaboration between public and private stakeholders in the fintech ecosystem. Objective: The Committee will become an effective platform to coordinate with different fintech stakeholders and the fintech community to streamline all necessary policies, procedures and resources for fintech development. Recommended action: Establish a Hong Kong Fintech Ecosystem Committee (The Committee) . It could be co-chaired by a bureau related to fintech development. The roles and responsibilities of the Committee would cover: • Coordinating, formulating and implementing strategic plans for fintech development; • Establishing local and international fintech networks; • Forming fintech research groups; • Reviewing existing financial regulations and government- funded programs; • Outlining talent development strategies; • Operating as a platform to centralize fintech-related information and resources. As of January 2021, there were more than 600 fintech companies, eight virtual banks, three fintech unicorns, over 160 licensed banks, and more than 160 authorized insurers in Hong Kong. 286 In Hong Kong, there are separate public agencies coordinating fintech policy and initiatives such as Cyberport , the largest fintech community in Hong Kong; and Hong Kong Science and Technology Parks (HKSTP) , the largest technology R&D base in the city. Other government units such as The Hong Kong Trade Development Council (HKTDC) and InvestHK , as well as some private large corporates like Tencent and Accenture , have also established their fintech communities in the city. Both Innovation and Technology Bureau (ITB) and Financial Services and the Treasury Bureau (FSTB) are government bureaus managing fintech. However, the fintech sector and startups community have expressed that the roles and functions of ITB and FSTB regarding fintech development are somewhat ambiguous. 287 Without a cross-industry platform, it is difficult to enhance mutual understanding and facilitate collaboration between public and private stakeholders in the fintech ecosystem. To promote digital finance and bolster fintech development efficiently, there is an urgent need to establish an official Fintech Ecosystem Committee (Committee) . This Committee would coordinate with different fintech stakeholders to formulate a fintech strategy and establish a regional fintech sandbox. Serving as an official platform to facilitate communication and engagement within the fintech community, a Committee could provide mandates for stakeholders to reflect their views to the government and regulators, and maintain healthy and open relationships among public agencies, regulatory regimes, and market participants. Both Singapore and the UK already have independent fintech initiatives with cross- industry collaboration. The Singapore Fintech Association (SFA) and Innovate Finance from the UK have successfully constructed influential and united platforms, receive support from their governments, and are recognized by their local fintech communities. The SFA actively promotes collaboration among participants in the ecosystem and organizes cross-sector events such as Singapore Fintech Festival , which successfully promotes Singapore to the world stage and has become the world’s largest fintech festival. 288 Comparably, the UK’s Innovate Finance is committed to promoting the initiatives FinTech for Schools (to support the current and next generation of innovators) and Women in Fintech (to promote diversity and inclusion in the growing fintech industry). 289 The proposed Committee would not simply be an industry association. Instead, it should act as an official and non-profit platform to serve Hong Kong’s fintech community. The platform should welcome all stakeholders in the Hong Kong fintech ecosystem—from early stage start-ups to large fintech corporates; local, regional and international financial institutions; professional services firms; and the government—to contribute to the Committee . In close partnership with the government and regulators, it could: (1) connect local and overseas fintech communities; (2) attract local and overseas investment in Hong Kong; (3) attract overseas talent; and (4) retain local talent in the city. This Committee would not only benefit early-stage fintech start-ups, but also the whole community. This centralization of fintech information would ensure that industry stakeholders receive efficient and timely notification of any regulation changes and government initiatives. Simultaneously, it is expected that industry voices could be effectively communicated to the government and regulators through the mechanisms established. Taking the SFA as an example, at least half of its elected council members must be start-ups with revenue of less than S$1m (US$753,000) per year, to ensure a variety of start-up voices will be heard by the SFA . 290 288. Singapore Fintech Festival (2021). | https://www.fintechfestival.sg/ 289. Innovate Finance (2021). | https://www.innovatefinance.com/ 290. Varun Mittal. Lillian Koh. | Singapore: The Fintech Nation. Relentless Pursuit of Excellence. (Singapore: McGraw Hill, 2020, p.61) 286. InvestHK. | FintechHK: Fast track your next success (Jan 2021). | https://www.investhk.gov.hk/sites/default/ files/FintechHK%20Flyer_ENG_Jan%202021.pdf 287. Interview with The Advisory Board of the Fintech Research Project, dated 9 April 2021.