Latest Development on the Era of Smart Banking

Latest Development on the Era of Smart Banking

The Hong Kong Monetary Authority (HKMA) announced today (25 October 2017) a number of new developments on its Smart Banking initiatives to foster the healthy development of fintech ecosystem in Hong Kong. In his welcoming remarks at the HKMA Fintech Day today, Mr Norman Chan, Chief Executive of the HKMA, announced the progress made in two important areas: cross-border collaboration and enhanced research.

The initiatives are as follows:

  1. Collaboration with Singapore

a.

Co-operation Agreement - The HKMA and the Monetary Authority of Singapore (MAS) signed a co-operation agreement on fintech to formalise the collaboration between the two authorities on referrals of innovative businesses, joint innovation projects, sharing of information and exchange of expertise. The first collaborative initiative will be a joint project on trade finance.

b.

Trade Finance – Seven banks in Hong Kong have decided to commercialise an HKMA-led, Distributed Ledger Technology (DLT)-based, trade finance proof-of-concept into a production system named Hong Kong Trade Finance Platform (HKTFP) to digitise and share trade documents, automate processes and reduce risks and fraud. The HKMA is in discussion with the MAS on building a cross-border infrastructure to connect HKTFP with a similar trade platform in Singapore.

  1. Collaboration in Guangdong-Hong Kong-Macau Bay Area

a.

Fintech Award – The HKMA and the Office of Financial Development Service of Shenzhen (OFDS) will jointly organise a fintech award offering total prizes of about HK$7 million that recognise and reward outstanding fintech products and solutions for Hong Kong and Shenzhen financial institutions.

b.

Soft-landing Scheme – The OFDS will provide the support to Hong Kong fintech firms for establishing presence in Shenzhen. The HKMA is also working with Cyberport and the OFDS to explore the feasibility of establishing cross-border soft-landing facilities in Shenzhen, encouraging Hong Kong fintech firms to expand their business to the Mainland, and Mainland firms establishing themselves in Hong Kong.

c.

Talent Development Programme – The HKMA, with the help of the OFDS, has lined up a number of renowned high-tech companies in Shenzhen, including Ping An Technology, WeBank and Tencent, to offer summer intern positions for Hong Kong students to get first hand experience in the technology arena.

  1. Enhanced Research – The HKMA published its second whitepaper on DLT today, with help from the Law Society of Hong Kong, eminent law professors, consultancy firms and the Hong Kong Applied Science and Technology Research Institute, confirming the promising nature of DLT while acknowledging that DLT cannot be a universal solution for all financial applications. The HKMA will turn the findings and advice in the second whitepaper into a set of practical guidelines for the use of DLT in the banking sector in the future.

Mr Norman Chan said, “Technology is a game changer for the future of banking and payment services. It will differentiate winners from losers. I am very pleased to say that Hong Kong has made important progress in cross-border collaboration and the research on DLT applications. The collaborative efforts and enhanced research and talent development are the essential building blocks to facilitate financial innovation and prepare Hong Kong to advance to the new Smart Banking Era.”

The HKMA will continue to discuss and work with relevant stakeholders to facilitate the transformation of our banking system to a new and higher level of Smart Banking.

Hong Kong Monetary Authority
25 October 2017