Fintech in Greater Bay Area moves up a gear

Increased connectivity via the Greater Bay Area is forging closer cooperation with the mainland, allowing Hong Kong to harness regional talent and position as a fintech hub

As the Greater Bay Area (GBA) gradually tightens the links between Hong Kong and mainland China, financial institutions and technology companies in the GBA are exploring new ways to collaborate and create synergy.

"Hong Kong is a very mature financial market while the mainland has a lot of tech professionals. From an engineering and ICT perspective, there is a lot we can do in the GBA," says Sean Lee, managing director of digital transformation at Dell Technologies during the Asian Financial Forum 2019, which took place in Hong Kong.

Fintech companies are playing a critical role in plugging the finance gap occupied by the underserved clients. WeBank, a leading virtual bank in China, has over six million customers in China without any credit records placed at the mainland's China Credit Reference Center. Around 60% of WeBank's SME clients were previously unable to get loans from banks.

"Other collaborations that can take place are between financial players and industry players. China has a policy stating that the financial industry has to serve the real economy. Financial institutions have to understand the real needs of the customers," says Ma Zhitao, vice president and chief information officer at WeBank.

While Hong Kong was not the first mover in adopting new technology in the financial industry, the Hong Kong Government and Hong Kong Monetary Authority (HKMA) have launched several initiatives promoting fintech applications over recent years.

One development that has been garning considerable interest amongst financial players is the virtual bank scheme, whose progress is expected to stir up competitive pressures within the traditional banking industry. Virtual banks mainly focus on the retail banking business and have no need for physical branches, yet are able to operate and compete for the same business as traditional banks.

In Hong Kong, all banks are regulated under HKMA, including virtual banks.

"We can leverage on the regulatory environment in HK and the market size in the area, to build a fintech hub." says Prof KC Chan, GBS, JP, senior advisor at WeLab. "There is a higher layer of the GBA strategy, which is to build a good platform with competitive Chinese corporates."

Apart from the bank-client relationship, players within the financial industry also advocate open sources, where products have permission to use their source code, design documents or content, and application programming interfaces (APIs) to increase the number of partnerships.

Says Yu Shengfa, vice president at Ant Financial, "A lot of Ant's business is open to the whole finance industry. In that aspect, finance and technology are already integrated."

"Our focus is how to empower the financial industry by giving the players access to cutting-edge technology," he adds.

Through advances in technology, customers are able to enjoy a more satisfying retail banking experience. For instance, In Hong Kong, retail customers usually have to get a number and then wait in a lengthy queue before seeing a banking operative sitting behind a counter service.

"If you just give me an iPad, rather than getting a number and waiting in a queue, I may quickly help myself. Maybe what I need is just changing my home address, which I can do on the iPad," says Lee.

The personal touch retains its importance in banking life, though. "We focus so much on technology but we cannot ignore the aspect of experience. Banking is experience, it is not just about transactions," says Lee.

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