The surge in Hong Kong’s fintech industry can be traced back to 2017, when the HKMA launched its Smart Banking initiatives, including an enhanced fintech supervisory sandbox, the promotion of virtual banking and other schemes. The HKMA has built on that with its Fintech 2025 strategy launched in June 2021, which encompasses an “all banks go fintech” push.
Currently, Hong Kong is home to more than 800 fintech companies, up more than fourfold from the 180 it had five years ago. That growth has been powered by Hong Kong’s open market, a progressive and robust regulatory regime, sophisticated infrastructure, the free flow of capital, a rich talent pool and deep funding pool.
Also important has been Hong Kong’s long history as a global financial centre. “This is not something that is easily replicated, it’s been built over decades,” says Neil Tan, Chairman of the Fintech Association of Hong Kong. “You have to create the conditions for this to grow over time. It doesn’t matter how much money you throw at it, it’s more of a time issue.”
The fintech scene is built on strong financial sector foundations. According to the HKMA, Hong Kong has US$3.5 trillion worth of assets in its banking industry and is second only to Switzerland as a private banking centre. It is also Asia’s largest cross-border private wealth management centre and a hub for businesses wanting to raise capital, being one of the most active markets for stock market listings and bond issuance.
The financial services industry also contributed almost a quarter of Hong Kong’s GDP, and employed about 277,500 people – 7.6 per cent of the total workforce in 2021.