The recently published results of the Hong Kong Monetary Association‘s (HKMA) Tech Baseline Assessment indicate that the region’s banks are open to fintech adoption and are ready to pay for it too.
The Assessment, rolled-out in June 2021 in tandem with the HKMA’s ‘all banks go fintech’ initiative, took stock of Hong Kong banks’ current and planned adoption of fintech in the coming three years, and assessed whether there may be fintech business areas and technology types that would benefit from the HKMA’s support.
As part of its ‘Fintech 2025′ Strategy’, the HKMA is promoting the nationwide adoption of fintech by banks and encouraging them to fully digitalise their operations, from front-end to back-end.
Overall, the results of the Assessment indicate that the banking industry is supportive of the HKMA’s fintech drive and that they are prepared to dedicate healthy amounts of financial and talent investment to fuel its adoption.
Furthermore, most expect to make good progress in achieving their objectives for fintech adoption by 2025.
Adoption of the surveyed fintech business areas is expected to increase across the board. Although variations exist, it is clear that banks will increasingly apply fintech to not just the most popular areas of risk management and compliance, payments and lending, but also to investment/wealth management services, insurance business and green banking.
Naturally, the surveyed banks intend to leverage both established and emerging technology types in their assertion to fintech; with artificial intelligence (AI) and distributed ledger technology (DLT) use cases being forecast to skyrocket in the region.
Taking into account the results of the Assessment, the HKMA has said that it will formulate a roadmap of initiatives over the next few months of this year to promote developments in the fintech business areas; particularly those of the wealthtech, insurtech, greentech, AI and DLT sectors.
The process will see the HKMA engaging with other local authorities, including the Securities and Futures Commission, the Insurance Authority and the Mandatory Provident Fund Schemes Authority to identify opportunities for cross-sectoral collaboration.
Identifying how technology continues to reshape consumers’ expectations for banking services, Arthur Yuen, deputy chief executive of the HKMA, said that the Association is “pleased to see” the region’s banks’ response to fintech and the consumer demand for it.
Yuen added: “The HKMA’s work under the ‘all banks go fintech’ initiative is an important element of the ‘Fintech 2025’ Strategy and will support the Hong Kong banking sector to unlock the full potential of fintech.”