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Hong Kong’s FSDC releases two reports on fintech and DLT to foster development
The Financial Services Development Council of Hong Kong (FSDC) has released two research reports in order to foster the development and application of fintech and distributed ledger technology (DLT) in the country.
The fintech report titled “The Future of Fintech in Hong Kong” outlines the development of financial technology in various jurisdictions and offers recommendations on how Hong Kong can better embrace emerging fintechs.
“Hong Kong has a world-class financial sector, but only a nascent Fintech and DLT sector. In the furtherance of the financial sector in the long run, Hong Kong should develop these technologies on par with its mainstream finance,” Laura M Cha, Chairwomen of the FSDC, stated. “As the global Fintech and DLT ecology is maturing, Hong Kong needs to catch up in the race and demonstrate to local and international Fintech firms that Hong Kong offers opportunities for developing their businesses. The two reports set out both the broad directions and the focused areas to build a thriving Fintech sector.”
Blockchain or DLT, being one of the major development clusters in fintech, a subset to the Fintech Report entitled “Hong Kong - Building Trust Using Distributed Ledger Technology” or the DLT report examines more specifically the actionable items that Hong Kong could consider in the spectrum of DLT, including blockchain.
The fintech report keenly analyses the position of Hong Kong’s fintech in comparison with various other jurisdictions that are also keen on developing the fintech sector. The report gives a gist of overall fintech strategy that covers the nature, current status, issues and barriers and potential and concrete recommendations to enhance further development of fintech in Hong Kong.
These recommendations are gathered under five key areas, namely cybersecurity, payments and securities settlement, digital identity and know-your-customer utility, wealth technology and insurance technology, and regulatory technology.
On the other hand, the second DLT report provides an account of the benefits and challenges that are brought about by blockchain for the financial services industry. The report has given a four-pronged approach, suggesting the Government and the financial services industry to leverage Hong Kong strengths in DLT. This approach includes establishing a leadership function within government, establishing a hub or focal point for the DLT community, embracing digital currency development, and stepping up the commissioning of DLT-based proofs of concept.
With the dramatic advances in technologies, the financial services industry in Hong Kong is aiming to enter into a new era that fosters innovation in such nascent technologies.