Photo taken on May 6, 2020 shows the International Financial Centre (IFC), a landmark highrise in Hong Kong, China. (PHOTO / XINHUA)

Hong Kong has leading advantages for developing its fintech sector compared with its global peers, according to a study from the Hong Kong University of Science and Technology.

The study also suggests the city adopt strategies such as skilled personnel training programs and money incentives to further strengthen the city’s role as a global fintech hub.

Hong Kong has high sufficiency levels in its government support, financial regulations and business environment, according to the study, titled “Hong Kong Towards a Leading Global Fintech Hub: Best Practices and Recommendations Through Examining Other World Hubs”

Hong Kong has high sufficiency levels in its government support, financial regulations and business environment, according to the study, titled “Hong Kong Towards a Leading Global Fintech Hub: Best Practices and Recommendations Through Examining Other World Hubs”.

The ratings, with five levels from insufficiency to sufficiency, gauge the resources and efforts concentrated in the fintech sector of seven cities, including Singapore and London, per the Hong Kong’ first in-depth fintech development study.

In order to build financial talent teams to meet fintech market demand, the HKUST Business School suggests that Hong Kong authorities create a compulsory internship program for fintech students, establish a stronger certification link between the Continuing Education Fund, Qualification Framework and internship programs to promote on-the-job training opportunities, and lift current restrictions of the overseas talent program to allow remote work approval for fintech companies.

Tam Kar-Yan, the head of the study and a professor in the HKUST Business School, said, “While Hong Kong possesses qualities to develop a thriving fintech sector, it takes concerted efforts from the government, industry and academia to propel the city into a leading global fintech hub.”

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The Hong Kong Monetary Authority in November provided a maximum of HK$1 million ($128,000) in funding to local fintech firms for each eligible project under Fintech Supervisory Sandbox 3.0 — the project allowing banks and their partnering tech companies to conduct pilot fintech trials. The HKMA in June unveiled its “Fintech 2025” strategy to drive fintech development in the international financial hub.

The HKUST also proposed setting up a Hong Kong fintech ecosystem committee to streamline the development of Hong Kong’s fintech ecosystem, as well as establish a fintech infrastructure strategy focused on product development and financial inclusion.

Transforming Hong Kong into a regional fintech sandbox and prioritizing development of the Commercial Data Interchange are necessary to enhancing financial development, it said.

Meanwhile, the government should build up fund incentives to encourage innovation, including establishing a centralized incubation funding system by consolidating the resources from the public and private sectors, and reviewing, evaluating and promoting the tax-deduction policy for eligible research and development activities, the study said.

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Hong Kong in 2021 recorded a fast-growing number of more than 600 fintech companies and over 3,700 startups, up from 180 fintech companies and about 2,200 startups in 2017, according to the Innovation and Technology Bureau. The consumer fintech adoption rate in Hong Kong reached 67 percent last year, which is one of the highest in the world, the bureau said.

KPMG in July 2021 ranked Hong Kong among the world’s top 10 technology innovation hubs outside Silicon Valley over the next three years.

tianyuanzhang@chinadailyhk.com