HKMA to Establish Fintech Innovation Hub and “Sandbox”
- The watchdog is concerned that the city is losing ground to China, Australia and Singapore in the fintech race.
The Hong Kong Monetary Authority (HKMA) is to set up a Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term innovation hub and supervisory "sandbox" for financial technology innovation in the banking sector, according to a statement issued by the watchdog today.
The news comes shortly after the Monetary Authority of Singapore (MAS) announced a similar proposal for a regulatory sandbox for fintech startups aimed at making it easier for financial institutions and other companies to experiment with fintech offerings, as reported by Finance Magnates in June.
The Hub
The watchdog announced the new facility to support research and adoption of fintech business models in collaboration with the Hong Kong Applied Science and Technology Research Institute.
According to the HKMA: "The Hub is intended to be a neutral ground of the fintech industry, a place where various stakeholders can collaborate to innovate.”
“Industry players, such as banks, payment service providers, fintech start-ups, the HKMA, etc. can get together at this facility to brainstorm innovative ideas, try out and evaluate new fintech solutions, conduct proof-of-concept trials, and gain an early understanding of the general applicability of creative solutions for banking and payment services."
The Hub will accommodate around 200 workstations alongside virtual private networks connecting users to 30 external development laboratories in Hong Kong and overseas.
Regulatory “Sandbox”
In a related initiative, HKMA chief executive Norman Chan also announced plans to create a regulatory sandbox, where startups and banks can test solutions before applying for authorisation.
Chan said: "The sandbox allows banks to conduct tastings and trials of newly developed technology on a pilot basis. Within the sandbox, banks can try out their new fintech products without the need to achieve full Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with the HKMA’s usual supervisory requirements."
He added that it would "only apply to banks looking to use fintech, not to standalone fintech firms".
The initiative is in line with similar efforts by banking regulators in the UK, Singapore and Australia and is aimed at ensuring that Hong Kong doesn't fall behind rival economies in creating a supportive regulatory environment in which fintech can grow.
The Hong Kong Monetary Authority (HKMA) is to set up a Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term innovation hub and supervisory "sandbox" for financial technology innovation in the banking sector, according to a statement issued by the watchdog today.
The news comes shortly after the Monetary Authority of Singapore (MAS) announced a similar proposal for a regulatory sandbox for fintech startups aimed at making it easier for financial institutions and other companies to experiment with fintech offerings, as reported by Finance Magnates in June.
The Hub
The watchdog announced the new facility to support research and adoption of fintech business models in collaboration with the Hong Kong Applied Science and Technology Research Institute.
According to the HKMA: "The Hub is intended to be a neutral ground of the fintech industry, a place where various stakeholders can collaborate to innovate.”
“Industry players, such as banks, payment service providers, fintech start-ups, the HKMA, etc. can get together at this facility to brainstorm innovative ideas, try out and evaluate new fintech solutions, conduct proof-of-concept trials, and gain an early understanding of the general applicability of creative solutions for banking and payment services."
The Hub will accommodate around 200 workstations alongside virtual private networks connecting users to 30 external development laboratories in Hong Kong and overseas.
Regulatory “Sandbox”
In a related initiative, HKMA chief executive Norman Chan also announced plans to create a regulatory sandbox, where startups and banks can test solutions before applying for authorisation.
Chan said: "The sandbox allows banks to conduct tastings and trials of newly developed technology on a pilot basis. Within the sandbox, banks can try out their new fintech products without the need to achieve full Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with the HKMA’s usual supervisory requirements."
He added that it would "only apply to banks looking to use fintech, not to standalone fintech firms".
The initiative is in line with similar efforts by banking regulators in the UK, Singapore and Australia and is aimed at ensuring that Hong Kong doesn't fall behind rival economies in creating a supportive regulatory environment in which fintech can grow.