Fintech 2025 strategy unveiled

June 8, 2021

Monetary Authority Chief Executive Eddie Yue:
With the (COVID-19) pandemic, digitalisation is actually going mainstream. Most people are now a lot more used to digital payments, and central bank digital currency (CBDC) also in the last year, has fast been evolving as a topic that many central banks are looking at. And if the public is now getting a lot more used to digital payment, and if the other central banks are also exploring possible use cases for CBDC, noting that technology is something that you cannot really predict always in advance, you have to try it out and see whether you can actually make it successful along the way. Let us keep an open mind. Let us first look at the technical feasibility. Let us revisit the various pros and cons and the policy considerations. We are not saying that we will issue a retail e-Hong Kong dollar, we are saying that we will embark on this study to see whether there is a case for Hong Kong to issue a retail e-Hong Kong dollar.

The Monetary Authority today unveiled its Fintech 2025 strategy which aims to encourage the financial sector to adopt technology comprehensively by 2025, and provide fair and efficient financial services.

The authority's Chief Executive Eddie Yue said at a press conference that the strategy comprises five focus areas - all banks go fintech, future-proofing Hong Kong for central bank digital currencies (CBDCs), creating the next-generation data infrastructure, expanding the fintech-savvy workforce, and nurturing the ecosystem with funding and policies.

“Fintech is, without doubt, a key growth engine for the financial industry in the post-pandemic era, and now is the right time to double down on our efforts to grasp the opportunities. Fintech 2025 sets out our vision in this regard,” Mr Yue said.

To promote all-round adoption of fintech by Hong Kong banks, the authority will roll out a Tech Baseline Assessment to take stock of the banks’ current and planned adoption of fintech. This would help identify fintech business areas or specific technology types which may be underdeveloped and would benefit from the authority’s support.

In addition to the continued effort on wholesale CBDCs, the authority has been working with the Bank for International Settlements Innovation Hub Centre in Hong Kong to research retail CBDCs and will begin a study on e-HKD to understand its use cases, benefits and related risks.

“We will embark on this study to see whether there is a case for Hong Kong to issue a retail e-Hong Kong dollar,” noted Mr Yue.

The authority will also work with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a convenient means of cross-boundary payments for both domestic and mainland residents.

Hong Kong's existing data infrastructure will also be enhanced, which would include building the Commercial Data Interchange, digital corporate identity and distributed ledger technology-based credit data sharing platform to facilitate consent-based data sharing.

To groom more fintech talent, the authority will collaborate with various strategic partners through developing fintech-specific training programmes and qualifications, as well as promoting joint projects between the industry and the academia. The Industry Project Masters Network scheme will be piloted in September to provide internship opportunities to postgraduate students to work on banks’ fintech projects on federated learning and other artificial intelligence technologies.

The authority and industry key players will establish a new Fintech Cross-Agency Co-ordination Group to formulate supportive policies for the city’s fintech ecosystem. Preparatory work for the Hong Kong Growth Portfolio, which seeks to reinforce the city's status as a financial, commercial and innovation centre, is underway. The authority will also enhance its Fintech Supervisory Sandbox and is exploring with the Innovation & Technology Commission the possibility of providing funding support to qualified fintech projects.

“I urge all stakeholders to join forces with the authority. Together, we can take our city's fintech ecosystem to new heights,” Mr Yue added.