Hong Kong Fintech Ecosystem Report

LOOKING AHEAD 31 LOOKING AHEAD As Asia’s World City, Hong Kong stands as one of the premier international financial centers and a leading hub for asset management, banking, insurance and fundraising in the region. The city’s concerted efforts to enhance its fintech capabilities – through the establishment of regulatory frameworks, government support, public and private funding, talent development, and the encouragement of innovation – have successfully fostered an environment conducive to the growth of fintech companies and practitioners. This has resulted in one of the most vibrant fintech ecosystems globally. Boasting a large, digital savvy population with a high propensity to utilize fintech services, 74% of respondents in Hong Kong reported using at least two fintech services, while over 90% had adopted digital payments.³4 Business-to-business (B2B) adoption rates of fintech are also notably high, with 66% of the fintech companies focusing their efforts on this market segment.³5 A recent survey revealed that 92% of trading businesses in Hong Kong are embracing fintech solutions, expressing satisfaction with fintech-powered services.³6 A 2023 survey revealed that the adoption rate of Generative AI among financial institutions in Hong Kong reached 38%, significantly exceeding the global average of 26%,³7 reflecting Hong Kong’s financial services industry’s robust commitment to integrating AI technologies into its operations. In response to the growing utilization of AI technologies within the sector, the Financial Services and Treasury Bureau of the Government of Hong Kong released the "Policy Statement on Responsible Application of Artificial Intelligence in the Financial Market" on October 28, 2024. This policy statement emphasizes the government's dedication to fostering responsible AI applications in Hong Kong's financial services sector. It highlights the availability of AI models and infrastructure for industry stakeholders, encouraging financial institutions, accounting firms, and solution providers to utilize these resources for the collective benefit of all. A notable example cited in the statement is InvestLM, developed by The Hong Kong University of Science and Technology. InvestLM will facilitate inference and training through advanced AI models, enhancing decision-making and enabling the development of task-specific AI models using relevant data. The platform will be accessible to the industry, accompanied by training for on-premises deployment, as well as Application Programming Interface (API) and Web Interface options through HKUST's computing resources. A key feature of InvestLM's services will be its fine-tuning capabilities, tailored to meet the contextual requirements of Hong Kong’s industry, including compliance with local rules, regulations, and linguistic nuances. 34. https://www.trade.gov/country-commercial-guides/hong-kong-financial-services-fintech 35. https://www.trade.gov/country-commercial-guides/hong-kong-financial-services-fintech 36. https://www.chinadailyhk.com/hk/article/592269 37. https://www.finastra.com/financial-services-state-nation-survey-2023# :~:text=Our%20annual%20research%20 shows%20that,experiences%20that%20customers%20increasingly%20demand.