Fintech to Hong Kong

Trends and opportunities

The Market

Hong Kong’s Government has been actively promoting and allocating significant resources to the Fintech industry in Hong Kong to encourage banks, financial institutions and insurance companies to embrace and adopt financial technologies in their products and services to provide safer, faster and more convenient experiences and interfaces with their customers. These financial technologies covers a wide range of categories including artificial intelligence (AI), big data, blockchain, cyber security, insurtech, wealthtech, lending (crowdfunding), payment and billing systems, etc.

Cyberport is the key force spearheading and shaping Hong Kong's Fintech development. Backed by the Hong Kong Government, Cyberport is the digital technology flagship in town committed to inspiring innovation, nurturing entrepreneurs, and attracting global talent, partners and companies to Hong Kong for collaborations and business opportunities. Cyberport Smart-Space provides comprehensive supporting programmes such as Creative Micro Fund and Incubation programme to accelerate business growth (Source: Hong Kong Cyberport).

Enterprises developing Fintech products and solutions can benefit from new and existing funding schemes, including the Innovation and Technology Fund (ITF), as well as the Innovation and Technology Venture Fund and the Cyberport Macro Fund.

HK$200 million (approx. A$40 million) will be allocated to Cyberport to enhance the support for start-ups and promote the development of digital technology ecosystem. Cyberport is going to launch an "easy landing" programme to attract multinational companies (including overseas and Mainland leading internet enterprises and Fintech companies) to set up offices and R&D units in Hong Kong. It will also roll out a new support scheme, offering financial assistance up to HK$200,000 (approx. A$40,000) for each eligible start-up to conduct market research and promotion, as well as participate in business missions, trade fairs and exhibitions, etc. outside Hong Kong. The financial assistance offered under Cyberport's incubation programme to individual start-ups will also increase by 50 per cent to HK$500,000 (approx. A$100,000). (Source: Hong Kong Government 2018-19 Budget).

Innovation laboratories, incubation and accelerator programmes have been set up by a number of organisiations including Supercharger Fintech Accelerator, Blueprint, DBS Accelerator, and professional consultancy firms such as Accenture and KPMG to assist local and international Fintech start-ups to build up their technologies and identify potential investors. Australian-owned start-up company Bitspark also found its home in Hong Kong to establish and expand its remittance payment business. Australian Fintech company Austreme sets up a regional headquarter in Hong Kong to capitalise on the growing demand for cloud-based and big data-enabled eCommerce monitoring services (Source: InvestHK).

The Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Office of the Commissioner of Insurance has set up Fintech dedicated platforms to liaise with the industry to ensure that the market will balance between market demand and investors' understanding and tolerance of risk when introducing innovative financial products and services.

The Hong Kong Monetary Authority (HKMA) launched a Fintech Innovation Hub and a Fintech Supervisory Sandbox to provide a faster approvals process for Fintech experiments. Hong Kong investment promotion agency and Invest Hong Kong also established a dedicated team to organise international events and assist start-ups, investors and R&D institutions to establish their presence in Hong Kong.

Opportunities

These developments and initiatives taken by the Hong Kong Government, industries and businesses present excellent opportunities for Australian start-ups to consider using Hong Kong as a landing pad to explore and build up their Fintech businesses, identify potential investment opportunities and keep abreast of the latest developments of the Fintech industry in Hong Kong through attending major Fintech events in Hong Kong.

For Fintech companies’ first coming to Hong Kong, the opportunities to find partnership, collaboration, investment and customers are endless. Hong Kong has some of the world’s most largest and valuable financial industries such as commercial banking, lending, securities exchange, wealth management, insurance and payment processing.

Competitive environment

While the Hong Kong’s Fintech market is highly competitive, the collaborative nature of the sector allows for many different start-ups and entrepreneurs to find their niche in the country’s financial ecosystem. Many foreign companies from Fintech hubs across the globe have found success in Hong Kong from both established and emerging Fintech markets. Hong Kong is one of the top five markets for Australian startups looking for potential expansion due to the established financial industries and access to capital. (Source: EY FinTech Australia Census 2017 )

Tariffs, regulations and customs

Hong Kong has business friendly immigration policies. As such, visitors from over 170 countries/territories can enjoy visa-free entries to Hong Kong and stay for between seven to 180 days. Short-term visitors can make the most of Hong Kong’s light-touch visa policies and are permitted to conduct business negotiations and sign contracts while on a visitor’s visa or entry permit. Foreign nationals working in Hong Kong for longer periods of time require a working visa before they can live or work in Hong Kong. (Source: InvestHK , Visa and Immigration)

Industry standards

While some Fintech companies inherently disrupt standards and traditional business models found in financial industries, it is important for all new companies to be aware of existing regulation and practices in order to operate legally and be competitive. Hong Kong has a number of federal regulatory bodies in financial services and markets that establish and monitor standards, including the Hong Kong Monetary Authority , Securities and Futures Commission and Insurance Authority.

Marketing your products and services

Market entry

Before bringing a new product or service to the market, it is not only important that you adhere to regulation, but also to put your offerings through a certain level of testing to ensure quality and avoid future liability for losses that occurred using your products. For many early-stage Fintech companies it can be valuable to approach potential customers with a pilot project idea to not only develop your products better, but to also use as a case study when pitching to other customers as well.

A number of Fintech-friendly incubators in Hong Kong offer partnerships with banks and financial services incumbents that are interested in trialing new technology in their own operations, and are willing to give new companies limited access to data to test new ideas. The HKMA Fintech Supervisory Sandbox, SFC Regulatory Sandbox , and the IA Insurtech Sandbox in Hong Kong are such initiatives helping many Fintech companies innovate using real-world applications.

Distribution Channels

There are many events in the Hong Kong now focusing on Fintech that can be invaluable to foreign companies looking to learn about the market, gauge the competitiveness of their offerings, find like-minded companies and individuals to collaborate with, and scope opportunities for customers and partners for commercialisation.

Trade Events

Block O2O – Hong Kong Block Week
Elevator Pitch Competition
Fintech O2O
Hong Kong FinTech Week
RISE Startup Conference
StartmeupHK Festival

Links and industry contacts

Cyberport
Fintech Association of Hong Kong
Guangdong-Macao-Hong Kong Greater Bay Area Plan
HKTDC
Hong Kong Science and Technology Park
Innovation and Technology Commission
Innovation and Technology Fund
InvestHK
Securities and Futures Commission of Hong Kong
Hong Kong Monetary Authority

Hong Kong Fintech Directory

The Hong Kong Fintech Directory highlights the key market players that comprise the Fintech eco-system in Hong Kong. These players include the relevant government departments, regulatory agencies, industry associations, incubators / accelerators, corporate financial institutions that have dedicated Fintech programs as well as research centres. This is not an exhaustive list of key players. This directory supports Austrade’s ongoing efforts to connect the Australian Fintech eco-system with regional and global counterparts. This publication is intended for use by Australian businesses and a valid ABN is required to download the directory.

Contact details

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