Hong Kong Towards a Leading Global FinTech Hub

84 85 Part II: Key Observations, Policy Implications and Recommended Actions for Hong Kong The Committee could also nurture the local venture capital scene by establishing partnerships with venture capitalists, angel investors, private equity funds and accelerators from Mainland China and overseas to establish a Fintech Investor Network . By helping the local fintech community connect with global fintech communities, the Committee can foster the development of international partnerships. III. Establishing a Research Team for the Development of the Fintech Industry Another important function of the Committee is to establish a research team to conduct market research and regularly assess industry developments. This research would help the government and regulatory bodies formulate effective public policies. The research team could create and maintain a fintech company database to keep track of information such as a firm’s specific purpose, number of employees, major business partners, and local and international business networks. This would increase the Committee’s understanding of the market, and promote transparent communication among the local fintech network of the government, the fintech industry, the professional sector, and other public agencies. IV. Formulating a Fintech Talent Development Strategy Retaining talent and sustaining a talent pipeline for the city’s fintech development is another key factor to transform Hong Kong into a leading fintech hub. According to the Fintech Employment 2019 report, 95% of fintech companies in Hong Kong said they have been facing a severe shortage of fintech talent, and we expect this to grow until a solid and growing talent base is firmly established. The Committee would formulate a fintech talent development strategy that would include how to cultivate the necessary soft and hard skills in the local education system as well as to provide on-the-job training to upskill the existing workforce. In addition, continued efforts to attract overseas talent to Hong Kong would be beneficial. 293 Recommended actions #7-9 suggest detailed policy initiatives that would strengthen the fintech talent pipeline. 293. Hong Kong has been facing the shortage of skilled IT talent with the main reasons which the local universities could not supply graduates with in-demand IT, data science and computer engineering skills to meet the market needs. For details, please visit South China Morning Post (Mar 2021). | Hong Kong’s IT sector facing shortage of skilled talent as Covid-19 keeps foreigners away and locals mull. migration | https://www.scmp . com/news/hong-kong/hong-kong-economy/article/3125233/hong-kongs-it-sector-facing-shortage-skilled 294. Hong Kong Monetary Authority (2020). | 2020 Annual Report (p.5 ) | https://www.hkma.gov.hk/media/eng/ publication-and-research/annual-report/2020/AR2020_E.pdf V. Being a Centralized Information and Resource Platform The Committee could organize a centralized platform to provide Hong Kong fintech industry resources and policy information. Currently, accessing this information is a time- consuming effort, with sources scattered across multiple websites. Stakeholders would be able to easily access information about: (1) public policies; (2) information and resources related to sandbox and incubation hubs; (3) available programs and training for fintech practitioners; (4) local and international events; and (5) laws, regulations, and licensing issues. In particular, Hong Kong has been a pioneer in establishing virtual banks in the region, and the first batch of virtual bank licenses were granted by The Hong Kong Monetary Authority (HKMA) in March 2019, which resulted in a surge in the region’s digital banking development. In December 2020, all eight virtual banks in Hong Kong had officially launched their services, and had combined deposits of nearly HK$15bn. 294 Hong Kong’s experience in managing and operating virtual banks could be shared on the centralized platform to regional audiences and help strengthen Hong Kong’s leading position in digital banking.