The Hong Kong Monetary Authority (HKMA) today (2 November) co-organised Hong Kong FinTech Week 2023 with the InvestHK. The eighth edition of the city’s flagship fintech event gave participants worldwide opportunities to build partnerships, exchange ideas and share their fintech journeys.
During the FinTech Week, the HKMA announced the following initiatives to strengthen Hong Kong’s fintech capabilities:
FPS x PromptPay QR Payment: The HKMA is working closely with the Bank of Thailand to link Hong Kong’s Faster Payment System (FPS) and Thailand’s PromptPay, in a new service called “FPS x PromptPay QR Payment”, scheduled for launch on 4 December. Users will be able to scan and pay at over 8 million PromptPay merchants in Thailand using their mobile phones. Thai visitors to Hong Kong will also be able to use PromptPay to pay at any of the around 50,000 FPS merchants in Hong Kong who choose to accept FPS QR payments. The new service will provide an additional safe and efficient payment channel, enhancing customer experience in retail payment and fostering economic development and entrepreneurial prospects in the two economies.
Tokenisation in the bond market: After the successful issuance of the world’s first tokenised government green bond earlier this year, the HKMA is in discussions with market participants to explore further use cases for distributed ledger technology (DLT) in capital markets, including a second tokenised government green bond.A report on the inaugural tokenised issuance was published in August as a blueprint for future similar issuances in Hong Kong.
e-HKD Pilot Programme: Working with the industry, the HKMA has completed Phase 1 of the e-HKD Pilot Programme and published an overall assessment of the pilots and the way forward earlier this week. Phase 2 of the programme, which the HKMA intends to commence next year, will explore new use cases for an e-HKD and delve deeper into select pilots from Phase 1.
The “Fintech 2025” strategy1 unveiled in June 2021 has also made following positive progress in driving Hong Kong’s fintech development:
All banks go fintech: Building on the results of the Tech Baseline Assessment announced last year, the HKMA continues to proactively encourage fintech adoption in the banking industry, and published a new Fintech Promotion Roadmap in August 2023. The roadmap sets out the initiatives the HKMA will undertake over the next 12 months to promote the adoption of Wealthtech, Insurtech, Greentech, Artificial Intelligence and DLT. To further promote the development of Open API, the HKMA launched centralised datasets on physical branches and Automated Teller Machines of 20 retail banks in Hong Kong via Open API in September 2023 for public use. In addition, the HKMA has been actively exploring the use of Suptech to enhance the effectiveness and forward-looking capability of its supervisory processes through the adoption of new technologies. An end-to-end digital supervisory platform and a Robotic Process Automation solution have been launched. Three initiatives under the AML Suptech strategy; Macro Analytics, a submission platform for financial-crime risk data, and a horizon scanning tool, have been implemented to safeguard the integrity of the banking system and reduce harm from financial crime. A speech-to-text solution for use in supervision and enforcement work was also launched in October 2023.
Future-proofing Hong Kong for Central Bank Digital Currencies (CBDCs): Aside from the progress on the retail front, the HKMA has achieved a number of milestones in the phased development of wholesale CBDCs2. Project mBridge is now at the Minimum Viable Product (MVP) development phase and the HKMA aims to launch the MVP next year to pave the way for a production-ready system.
Creating the next-generation data infrastructure: Commercial Data Interchange (CDI), the HKMA’s next-generation financial data infrastructure promoting the development of a data-driven economy, is making great strides. Since launch in October 2022, the number of CDI participating banks has reached 26, and key data providers have doubled from 6 to 12. The CDI utilisation rate has also increased nearly ninefold to 8,900 data requests from close to 1,000 during the pilot phase, with estimated credit approvals exceeding HK$8 billion at the end of September 2023. To maximise the benefits of CDI, the HKMA is exploring how it can be used to further digitalise and streamline various banking processes such as Know Your Customer and working closely with the Insurance Authority to enable cross-sectoral data sharing. By the end of 2023, the Companies Registry will become the first government data source to be connected to CDI via the Government’s Consented Data Exchange Gateway.
Expanding the fintech-savvy workforce: The HKMA works to foster fintech talent in Hong Kong through initiatives including the Fintech Career Accelerator Scheme and the Industry Project Masters Network. Over 1,300 students have benefitted from these schemes so far.
Nurturing the ecosystem with funding and policies: The Fintech Supervisory Sandbox (FSS) 3.0 and FSS 3.1 Pilot offer funding support to fintech projects. So far, six projects providing solutions for Chinese-character name screening for AML, regtech and risk management have been approved. To facilitate the sustainable and responsible development of the virtual asset (VA) sector in Hong Kong, the HKMA has been moving forward with full steam in formulating the regulatory regime for stablecoin issuers, and will release a public consultation paper inviting feedback on the proposed regulatory approach and parameters. In addition, the HKMA and the Securities and Futures Commission have jointly issued updated guidance on intermediaries’ VA-related activities, and the HKMA is consulting the industry on guidance on other digital asset-related activities conducted by banks with a view to providing protection for consumers.
Mr Eddie Yue, Chief Executive of the HKMA, said, “This year’s edition of the Hong Kong FinTech Week marks 30 years since the establishment of the HKMA. It comes at a time of rapid innovation, with new ideas and opportunities redefining the fintech world. It is essential for our financial services sector to adapt to these changes so that we can continue to be at the forefront of development and achieve the vision set out in the ‘Fintech 2025’ strategy.”
Hong Kong Monetary Authority
2 November 2023
Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, delivers the opening keynote at the Hong Kong FinTech Week 2023.
In his keynote at the Hong Kong FinTech Week 2023, Mr Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority, shares with the audience three fintech areas to watch out for, namely cross-border payments, use of data and tokenisation.
Before going on stage to deliver his keynote, Mr Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority, appears as an avatar at the Hong Kong FinTech Week 2023.
1 The strategy aims to encourage the financial sector to adopt technology comprehensively by 2025, as well as to promote the provision of fair and efficient financial services for the benefit of Hong Kong citizens and the economy.
2 A brochure highlighting the key achievements and future roadmap of Project mBridge was published in October 2023: https://www.hkma.gov.hk/media/eng/doc/key-functions/financial-infrastructure/mBridge_publication.pdf
I am an expert in financial technology (fintech) with a deep understanding of the industry's latest developments and trends. My knowledge is not only theoretical but also practical, backed by extensive experience and involvement in various fintech initiatives. Now, let's delve into the concepts mentioned in the article about the Hong Kong Monetary Authority's (HKMA) FinTech Week 2023.
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FPS x PromptPay QR Payment:
- The HKMA is collaborating with the Bank of Thailand to launch "FPS x PromptPay QR Payment," connecting Hong Kong's Faster Payment System (FPS) with Thailand's PromptPay.
- This initiative allows users to scan and pay at over 8 million PromptPay merchants in Thailand using their mobile phones, enhancing retail payment experiences and fostering economic development.
-
Tokenisation in the Bond Market:
- Following the successful issuance of the world's first tokenised government green bond, the HKMA is exploring further use cases for distributed ledger technology (DLT) in capital markets.
- Discussions include the potential issuance of a second tokenised government green bond, building on the blueprint provided by the report on the inaugural tokenised issuance.
-
e-HKD Pilot Programme:
- The HKMA has completed Phase 1 of the e-HKD Pilot Programme, aiming to explore new use cases for an electronic Hong Kong Dollar (e-HKD).
- Phase 2, scheduled for the next year, will delve deeper into select pilots from Phase 1, contributing to the ongoing development of digital currency in Hong Kong.
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"Fintech 2025" Strategy:
- The HKMA is actively encouraging fintech adoption in the banking industry, focusing on Wealthtech, Insurtech, Greentech, Artificial Intelligence, and DLT.
- Initiatives include the promotion of Open API, launching centralised datasets on physical branches and Automated Teller Machines, and exploring the use of Suptech for supervisory processes.
-
Future-proofing for Central Bank Digital Currencies (CBDCs):
- Project mBridge is in the Minimum Viable Product (MVP) development phase, with the aim to launch the MVP next year to pave the way for a production-ready wholesale CBDC system.
-
Commercial Data Interchange (CDI):
- CDI, launched in October 2022, is the HKMA's next-generation financial data infrastructure promoting the development of a data-driven economy.
- The number of CDI participating banks has increased to 26, and key data providers have doubled. CDI is being explored for various banking processes, including Know Your Customer.
-
Fintech Workforce Development:
- The HKMA fosters fintech talent in Hong Kong through initiatives like the Fintech Career Accelerator Scheme and the Industry Project Masters Network, benefiting over 1,300 students.
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Fintech Ecosystem Support:
- The Fintech Supervisory Sandbox (FSS) 3.0 and FSS 3.1 Pilot provide funding support to fintech projects, including solutions for AML, regtech, and risk management.
- Regulatory efforts focus on formulating a stablecoin issuer regime and providing guidance on digital asset-related activities conducted by banks.
In conclusion, the HKMA's efforts in the FinTech Week 2023 reflect a comprehensive strategy to drive fintech development in Hong Kong across various domains, from payment systems and tokenisation to digital currencies and data infrastructure. These initiatives aim to position Hong Kong at the forefront of fintech innovation and align with the broader vision outlined in the "Fintech 2025" strategy.
