Love Island for fintechs

A myriad of financial services, all looking for a fintech to embrace, makes Hong Kong a great destination, says Charles Ng, Associate Director General at InvestHK

THE FINTECH MAGAZINE: Can you tell us more about the fintech ecosystem in Hong Kong?

CHARLES NG: We have 600-plus fintech companies in Hong Kong. It’s a sector that has enjoyed amazing growth. We see that from the survey we conduct with all the co-working spaces – innovation and research labs and accelerator programmers were only three co-working spaces here when we started the startup journey in 2013; now we’ve more than 100. And we’ve seen seven unicorns emerge – one, WeLab, was recently successful in applying for a virtual banking licence.

More than 18 per cent of Hong Kong’s GDP is driven by financial services. They employ more than 230,000 professionals with many more in the sectors that support them – accounting firms, law firms, M&E firms, consulting firms, and so on. All of these help this ecosystem come together and grow.

TFM: What sets Hong Kong FinTech Week apart from other events?

CN: The recent fourth edition of Hong Kong FinTech Week attracted 200 speakers from more than 60 countries. An anticipated 10,000 participants connected with each other, engaged with each other. But for us, the numbers aren’t so important; it’s about quality, not quantity. The stakeholders that you meet at Hong Kong FinTech Week are senior executives from financial institutions, banks, insurance companies, asset management, private equity brokerage firms. They are also from organisations like telcos and, through our engagement with various associations, accounting and law firms that represent the various industries in Hong Kong, from manufacturing to logistics.

TFM: Why would fintechs choose Hong Kong over some of your neighbours as a base in Asia?

CN: There are a couple of reasons. The first thing these companies are looking for is business opportunity. And we have 160 licensed banks, eight startups with new virtual banking licences, and 162 licenced insurance companies. Then there are the asset management companies, security firms, funds of funds, sovereign funds, family offices, you name it, they are here in Hong Kong. So, we have a very big range of financial companies, which we anticipate will attract more. The big technology giants in mainland China are also expected to make a second listing in Hong Kong. So, with that level of activity and momentum, we believe there is a need for financial companies to embrace fintech solutions and services.

But that is only one part of it. Fintech is not just for financial services; it cuts across other sectors, such as telcos. And we have a lot of telcos in Hong Kong! With the adoption of 5G in Asia, there are many synergies between them and the financial service companies and fintechs.

TFM: How does the Hong Kong financial service ecosystem fit into the wider financial services ecosystem in Asia?

CN: We want a strong ecosystem, in Singapore, in Japan, Korea, India… we want all these countries around us, and in other hubs, to be flourishing, because that’s the only way there will be a good exchange of demand and supply.

The world is big enough for everybody; there’s no such thing as pure competitors. We’re collaborators in many things – our regulators have a collaboration with Switzerland and with Singapore – and we’d love to see more of it.

I would really urge any government who is interested in collaborating with us, to reach out… as we are.