young blood, fresh ideas are key to Hong Kong’s digital financial future, say industry leaders

by James · March 9, 2023

The future of fintech in Hong Kong will rely on young blood and new ideas, and the city offers many advantages that will help nurture the sector, industry leaders told a conference.

“The importance of connecting young people with fintech is obvious because digitization in the financial sector will continue to accelerate in the coming years,” said Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA).

“The younger generation is truly the most important source of new talent and, more importantly, the source of new ideas and innovation, which are so important to the future of fintech.”

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He made his comments during a keynote address at the Greater Bay Area Fintech Talent Summit on Thursday.

The Greater Bay Area Fintech Talent Initiative is a program organized by the HKMA, Bloomberg and the Hong Kong United Youth Association. The first intake of 323 students completed a three-week training course which ended on 3 March.

More than 20 financial giants, including Goldman Sachs, HSBC, Citigroup and Hong Kong Exchanges and Clearing, which runs the local exchange, are lending their support to the initiative.

Aimed at nurturing fintech talent in the Bay Area, Beijing’s plan links Hong Kong, Macau and nine cities in Guangdong province to form an economic powerhouse by 2035.

Finance Secretary Paul Chan Mo-po said the city’s access to the zone with its 87 million residents gives fintech companies a huge advantage.

“The GBA is a huge market for our fintech companies [and] will provide enormous opportunities ranging from product development and distribution to asset management and surfaces,” said Chan, who spoke at the event.

“GBA is a big market for our fintech companies [and] will provide enormous opportunities, Finance Minister Paul Chan said at the conference. Photo: SCMP Pictures alt=”GBA is a huge market for our fintech companies [and] will provide enormous opportunities,” said Finance Minister Paul Chan at the conference. Photo: SCMP Pictures>

Hong Kong offers a business-friendly environment, Chan said, as well as the free flow of capital, making it a very attractive location for fintech companies.

“We are committed to leveraging this unique ecosystem to drive fintech development forward. Looking ahead, it is imperative that we continuously improve in the fast-paced world of fintech,” he said.

The world’s top financial firms will need exposure to fintech, Chan added, as online payments become more common.

The use of online payment systems has seen a sharp increase in Hong Kong. The city saw its online retail sales reach HK$34.6 billion (US$4.41 billion) in 2022, up by about a fifth from the previous year, according to data from the Census and Statistics Department.

Nicholas Aguzin CEO of HKEX also attended the summit. In a panel discussion, he said Hong Kong is “creating an innovation cluster” and described it as a “Silicon Valley and Wall Street all rolled into one”.

David Liao, managing director of HSBC Asia-Pacific, said the Bay Area offers a “rich wealth of career opportunities.”

“The GBA is the new vanguard of China’s development and will be for many years to come – in investment, finance, fintech and trade,” Liao said. “We are delighted that more than 300 students from local universities participated in the initiative, helping to build a strong pipeline in Hong Kong’s talent pool.”

Hong Kong’s “one country, two systems” is a major strength, according to Liao, as it provides the best of two worlds – access to the world’s second-largest economy and the internationalism of Hong Kong’s financial center.

The government has slowly introduced several talent schemes it hopes will tackle the so-called brain drain which has seen the local workforce shrink by around 140,000 between 2020 and 2022.

The government’s recent budget announcement included a scheme for secondary school students aimed at helping them access fintech internships in technology companies. The initiative will work alongside other recent policies aimed at attracting professionals and top university graduates.

Speaking during another panel discussion at Thursday’s summit, Jia Mao, Goldman Sachs’ global head of data science and machine learning, cited the benefits of blockchain technology in facilitating innovations that will support the transition to clean energy, such as tokenized green bonds.

Goldman Sachs was one of the four banks that partnered with the HKMA in the HK$800 million tokenized green bond rollout last month. The issuance relies on a digital asset platform built on top of blockchain technology.

“Blockchain technology has potential and is already starting to show us how it can fundamentally transform the way financial transactions can be done almost cleanly with more transparency, more efficiency and at lower costs,” he said.

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 © 2023 South China Morning Post Publishers Ltd. All rights reserved.