JPMorgan, Endowus says Hong Kong has the talent, capital and location to be a global hub

by James · November 1, 2022

Hong Kong has a wealth of talent and infrastructure that will support its push to be a world leader in the fintech industry, top business leaders have said ahead of the Global Financial Leaders Investment Summit in Hong Kong.

The city is home to high-quality talent not seen anywhere else, said Mary Callahan Erdoes, managing director of JPMorgan Chase’s asset and wealth management business. “The talent, the drive, the innovation … I haven’t seen that in a very long time in any particular area,” she said in an interview.

The CEO visited Hong Kong ahead of the summit, which is organized by the Hong Kong Monetary Authority. The American bank will be represented at the event by its chief operating officer Daniel Pinto.

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Mary Callahan Erdoes, CEO JPMorgan Asset & Wealth Management, photographed in Central on October 25, 2022. Photo: Xiaomei Chen alt=Mary Callahan Erdoes, CEO JPMorgan Asset & Wealth Management, photographed in Central on October 25, 2022. Photo: Xiaomei Chen >

“Some of the apps built here in Hong Kong are going to be the core technology platform for a lot of what we do around the world, so this is very exciting,” said Erdoes, who described the technology being developed by JPMorgan in Hong Kong as “right and simply wonderful”.

Yet the pandemic saw an exodus of high-quality talent amid the government’s strict Covid-19 quarantine measures. This prompted Hong Kong Chief Executive John Lee Ka-chiu to take more active and aggressive efforts to vie for companies and talent, a key plank in his policy address last month.

To attract companies with high potential in artificial intelligence and fintech, the government said it will dangle incentives under the Office for Attracting Strategic Enterprises scheme. This will include land and tax concessions and fiscal support, including assisting their personnel with visas and the educational needs of their children.

Meanwhile, the new Top Talent Pass scheme aims to lure high caliber people by granting a two-year visa to anyone earning at least HK$2.5 million (US$318,480) a year, or anyone who has graduated from one of the world’s 100 best universities and have at least three years’ work experience.

Singaporean digital wealth platform Endowus, which opened an office in Hong Kong earlier this year and recently acquired Hong Kong-based wealth manager Carret Private, believes Hong Kong’s strategic location as a gateway to mainland China and its vibrant urban lifestyle continue to do so to an undeniably attractive choice for global talent.

“Hong Kong’s market depth and robust capital markets allow fintech firms to better access funding and network resources,” Steffanie Yuen, the company’s Hong Kong head, told the Post.

Current headwinds for the city include talent shortages and leakage, particularly on the software engineering front, according to Yuen. However, the government’s HK$30 billion co-investment fund is a step in the right direction.

Hong Kong’s leading position as an international financial center, along with its deep expertise in the region, gives it an “advantageous location in the Greater Bay Area”, said Bing Li, head of Asia-Pacific at Bloomberg, a US financial data company. .

The carbon market is one area Li believes could benefit from fintech innovation. For example, blockchain technology could be used to increase transparency in carbon market transactions, he said. No other financial center is better suited to connect investors to China’s carbon emissions market, he added.

Meanwhile, Finance Minister Paul Chan Mo-po has expressed his desire to push Hong Kong as a global center for virtual assets.

Digital assets have grown in popularity in recent years due to the proliferation of non-fungible tokens and cryptocurrency trading. A joint survey by KPMG and Aspen Digital found that nearly 60 percent of ultra-wealthy individuals and family offices in Hong Kong and Singapore allocated a small portion of their portfolios to digital asset investments.

Regulators need to fine-tune their policies to make digital asset investments more suitable for family offices, said Paul McSheaffrey, senior banking partner at KPMG China. The survey found that the biggest concerns of investors were the lack of regulatory guidelines, protection and tax breaks.

Credit Suisse chief China economist David Wang echoed those concerns, saying Hong Kong needs to introduce a “transparent and stable regulatory framework” that can promote the use of digital assets.

“The government needs to introduce low convertibility restrictions between digital assets and more liquid assets, and a strong institutional framework to protect digital assets from illegal access,” Wang said.

In addition, the Hong Kong Monetary Authority has studied the introduction of e-HKD and e-CNY digital currencies, which upon launch will make Hong Kong the only city in the world with two digital fiat currencies in circulation.

A pilot program that has been running since August involved four currencies and 20 commercial bank participants, including HSBC, Standard Chartered Bank and Bank of China, across four jurisdictions on the mBridge pilot network.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit SCMP’s Facebook and Twitter sides. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.