Hong Kong Towards a Leading Global FinTech Hub

94 95 Part II: Key Observations, Policy Implications and Recommended Actions for Hong Kong Incubators offer necessary resources including funding, advice, and business networks, for the early development of startups. Funding for incubators could come from the government, private investors, entrepreneurs, universities, and a particular industry. 315 In Hong Kong, a number of local and global incubators are available for startups. 316 They are funded and organized by different private companies and public organizations, and target general technological startups or specific industries. 317 Hong Kong is one of the areas that have launched the Fintech Innovation Lab , a cross- region fintech program. Fintech Innovation Lab is supported by top global financial service firms and is meant to provide professional assistance to early-stage innovative fintech companies. 318 Cyberport 319 and HKSTP 320 are the two main government-funded incubators. Specifically for fintech development, Cyberport has the biggest fintech ecosystem in Hong Kong and includes companies specializing in technologies like Opportunity 6 Observation: There are several local and global incubators in Hong Kong for startups. These incubator programs are funded and organized by different private companies and public organizations, and usually target either general technology startups or specific industries. The fragmented structure of fintech incubators has meant they have had less impact on the overall success of the Hong Kong fintech ecosystem. Objective: To attract not only local startups, but also startups from the Asia Pacific region to enable them to access Hong Kong’s comparatively rich resources. The initiative is expected to activate the flow of R&D and fintech talent as well as investments. Recommended action: Establish a centralized incubation funding system by consolidating the resources from public and private sectors. 315. My Business. | 3 ways business incubators can help startups. | https://mybusiness.singtel.com/techblog/3-ways- business-incubators-can-help-startups 316. For instance, Founder Institute, based in Silicon Valley, is carrying the mission to bring impacts and empower talents by funding and helping international technology companies. For details, please visit https://fi.co/ 317. For instance, azalvo is an incubator working with sustainable fashion and lifestyle startups in need of connections with business partners. For details, please visit https://www.azalvo.com/about/ 318. Fintech Innovation Lab. | https://www.fintechinnovationlab.com/about/ 319. Cyberport Incubation Programme offers up to US$65,000 to startups to execute their products and solutions. For details, please visit http://www.cyberport.hk/en/about_cyberport/cyberport_entrepreneurs/cyberport_incubation_ programme 320. Hong Kong Science and Technology Park’s Incubation Programmes mainly focus on biotechnology, technology and mobile applications. For details, please visit https://www.hkstp.org/en/innovate-with-us/incubation/ 321. Legislative Council Panel on Information Technology and Broadcasting. | Annual Work Progress of Cyberport and the Cyberport Expansion Project (May 2021). | https://www.legco.gov.hk/yr20-21/english/panels/itb/papers/ itb20210510cb1-868-2-e.pdf 322. DATA.GOV.HK . | Cyberport Incubation Programme (2021). | https://data.gov.hk/en-data/dataset/cyberport- cyberport1-data-on-cyberport-incubation-programme blockchain, mobile payments, cybersecurity, AI, big data, and program trading. 321 One hundred and thirty (130) applications were approved under the Cyberport Incubation Programme in 2020-21, with a success rate around 20%, 322 indicating that the program is very competitive and not satisfying demand from startups. The fragmented structure of fintech incubators has weakened their impact on the overall success of the Hong Kong fintech ecosystem. Therefore, to promote Hong Kong as the leading Asia Pacific fintech incubation hub, we suggest the creation of a centralized incubation funding system supported by Cyberport, HKSTP, the private sector (venture capital and angel investors), and the government. To increase the impact of existing incubators, further coordination between each incubator and additional funding pools for fintech companies and startups (in financial services and other areas such as insurtech and wealthtech) are needed. We envision this centralized Fintech Incubation Hub would target both Hong Kong and Asia Pacific region startups to boost the region’s R&D and fintech talent and overall fintech ecosystem. A resource-centralized incubation program would significantly impact development of the fintech industry.