The Hong Kong Monetary Authority has revealed that it is establishing a Fintech Innovation Hub and a supervisory sandbox that will permit banks to conduct proof of concept trials and services as the country attempts to boost the development of Fintech in the financial services sector.
In a speech at a summit in Hong Kong, Chief Executive of the Hong Kong Monetary Authority (HKMA), Norman Chan, said that the Fintech Innovation Hub ‘allows regulators to provide early inputs to the trial works before the actual implementation.’
While some of the largest banks have built their own laboratories, this new Fintech Innovation Hub will cater for the big and small institutions alike such that the industry as a whole would be able to adopt new technologies more speedily and in a more collaborative manner.
In a bid to get ahead of countries such as Australia and Singapore, which are undertaking similar steps, Chan explained that the Fintech Innovation Hub will be perfect for two types of activities.
Firstly, it will allow banks to test Fintech solutions that include a number of parties that are intended to be adopted within the industry. For example, biometric authentication. By utilizing the Fintech Innovation Hub, developers can gather feedback from potential users in addition to guidance at an early stage when developing various facial or voice recognition techniques.
Secondly, Chan mentions that he sees the use of the Fintech Innovation Hub benefiting the Hong Kong Monetary Authority.
We could explore with innovators options and possibilities of using new technologies, such as Big Data Analytics and other “regtech” initiatives, to achieve our objectives more effectively without creating undue risks or burden for our internal systems or databases.
According to Chan, there is a perception that the development of Fintech within the financial services sector in Hong Kong is slow; however, he doesn’t believe this to be the case.
He states that:
In the past few months, banks and stored value facility operators have already launched new payment facilities built on smart phones and New Field Communication technology. These facilities have the potential of altering fundamentally the way consumers make payments.
He also adds that blockchain, robotics and augmented reality (AR) are being explored by banks to improve their services or streamline their operations.
That, however, doesn’t seem to be enough for Hong Kong when it comes to beating its competitors.
In a bid to support the development of Fintech in the banking sector the Hong Kong Monetary Authority has launched its Fintech Supervisory Sandbox.
Through the Sandbox banks will have the chance to conduct tests and trial newly developed technologies and applications.
Within the Sandbox, banks can try out their new Fintech products without the need to achieve full compliance with the HKMA’s usual supervisory requirements.
This, in turn, means that banks can collect real-life data and feedback from users easily and in a controlled environment so that they can make any changes before their products are fully launched.
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Last modified: June 26, 2020 9:56 AM UTC