HKMA’s support to fintech development in Hong Kong

By  Michael P. W. Wong

The Hong Kong Monetary Authority (HKMA), announced on 6 September 2016, the launch of Fintech Innovation Hub (FIH) and the Fintech Supervisory Sandbox (FSS).

The FIH will be jointly established by the HKMA and the Hong Kong Applied Science and Technology Research Institute for the purposes of supporting and promoting the research and development of fintech by the local financial services industry.  The FIH will be equipped with all the requisite IT systems and supported by technical teams, enabling industry players to pioneer or build upon new fintech solutions, such as enhanced biometric authentication and integrated mobile payment services.  In addition, operation of the FIH is expected to facilitate dialogue between the HKMA and the relevant industry players on emerging technologies by serving as a common training venue.  For instance, the HKMA may wish to explore “regtech” solutions to improve its regulatory efficiency in the FIH.

On a similar note, the FSS will be launched in order to allow authorized institutions (AIs), such as banks, to conduct trials of newly developed fintech products or services without the need to comply with the HKMA’s usual supervisory requirements.  This expedited arrangement enables AIs to gather user feedback and refine new technologies before they are officially launched.  However, participating AIs are expected to already have sufficient customer protection measures and risk management controls in place during the trial period.

Further details concerning the arrangements of both the FIH and the FSS will be announced by the HKMA in the near future.  These initiatives not only illustrate the HKMA’s commitment towards the development of fintech but also highlight the HKMA’s willingness to encourage the adoption of newer and more efficient technology.

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