Hong Kong reaps the fruits of fintech seeds sown nearly 10 years ago

When Alvin Kwock, co-founder of digital insurer OneDegree, took part in the inaugural Hong Kong FinTech Week in November 2016, it was held at a venue suitable for only a few hundred people.

“As it was the first ever fintech event in Hong Kong, only fintech start-ups were interested, no big financial institutions paid attention,” Kwock said. “People did not have a clear idea of fintech as it was still in an exploratory stage.”

In the years since, fintech in Hong Kong has gone through a sea change. “Now fintech is no longer confined to a few start-ups; it’s on the top of the agenda of banks and insurers,” Kwock said.

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The venue has moved from the PMQ (formerly the Police Married Quarters) to the massive Hong Kong Convention and Exhibition Centre, with the number of attendees growing 18-fold to 45,000 people. At the recent forum, speakers included some of the most high-profile figures in the financial sector like HSBC CEO Georges Elhedery and Standard Chartered Bank CEO Bill Winters.

HSBC CEO Georges Elhedery (left) takes part in a discussion with Financial Secretary Paul Chan Mo-po (centre) and Standard Chartered CEO at the Hong Kong FinTech Week on November 3. Photo: Jonathan Wong alt=HSBC CEO Georges Elhedery (left) takes part in a discussion with Financial Secretary Paul Chan Mo-po (centre) and Standard Chartered CEO at the Hong Kong FinTech Week on November 3. Photo: Jonathan Wong>

This maturation has intensified Hong Kong’s long-standing rivalry with Singapore. The two cities are competing to develop fintech, a rivalry highlighted this month as both hosted their 10th annual flagship fintech festivals.

While attendance in Hong Kong may have been thinner than in Singapore, the city has an edge over its Southeast Asian rival, thanks to its vibrant capital market providing funding for fintech companies and serving as a gateway to the Greater Bay Area.

Hong Kong secured the world’s top fintech ranking for the first time in the Global Financial Centres Index in September, while Singapore ranked fourth, according to the report by Z/Yen and the City of London that tracked 116 centres based on criteria like regulations, access to finance and talent.

In the inaugural survey on fintech in 2017, Hong Kong ranked seventh and Singapore eighth. The same year, the Hong Kong Monetary Authority (HKMA) introduced the first phase of fintech development.

Since then, the HKMA has issued eight digital banking licences, with the lenders offering online-only services. This week, British digital bank Revolut announced plans to launch operations in Hong Kong.

The arrival of global players is a direct result of a concerted regulatory push – the HKMA’s fintech initiatives, the Insurance Authority‘s promotion of virtual insurance, and the Securities and Futures Commission‘s rules for virtual asset trading. Bourse operator Hong Kong Exchanges and Clearing’s listing reforms too have paved the way for start-ups to raise funds.

“Hong Kong’s fintech development in the past decade has been nothing short of transformative,” said HKMA chief executive Eddie Yue Wai-man in a written interview. The 18-fold increase in the number of participants in this year’s FinTech Week compared with nine years ago was “proof not only of growing interest but also of a hub that has become a magnet for talent, ideas and ambition in fintech”, he said.

However, a broader measure of digital competitiveness reveals ongoing challenges. Despite Hong Kong’s many advantages, Singapore ranked third and Hong Kong fourth in the 2025 World Digital Competitiveness Ranking released earlier this month.

The report, however, noted that Hong Kong performed the worst in “IT integration”, placing 29th overall, due to low scores in government cybersecurity capacity and legal framework for privacy protection.

Singapore, which topped the ranking in 2024, fell behind Switzerland and the US this year.

The report said Singapore was strong in its digital regulatory framework and hi-tech patent grants, topping these categories. The institute also highlighted Singapore’s weakness in two areas, where it ranked 29th in technology, media and telecommunications stock market capitalisation and 61st in telecommunications investment.

Analysts and fintech firms regard Singapore and Hong Kong as Asian fintech leaders, albeit with different roles.

“Singapore offers a more accessible pathway for regional expansion across Asean, whereas Hong Kong’s competitive strength remains closely tied to the China-Hong Kong corridor and its leadership in regulated digital-asset innovation,” said Benjamin Quinlan, CEO and managing partner of Quinlan & Associates, a Hong Kong-based consultancy.

Quinlan said Hong Kong had also made progress in digital asset and tokenisation initiatives, including the coming stablecoin regime and tokenised government bond issuance, which provided a unique competitive angle in this emerging sector.

Singapore, by contrast, had positioned itself as a launch pad for the Association of Southeast Asian Nations, while the country had a clean regulatory environment and was innovation-friendly, supported by comparatively lower barriers to entry and a strong investor appetite, Quinlan said.

The HKMA’s Yue said the gateway role to mainland China would continue to be a major advantage for Hong Kong’s fintech development, as companies took advantage of cross-border trading schemes in stocks, bonds, swaps, exchange-traded products and wealth management.

Yue added that the development of fintech had benefited many sectors like digital banks, while also making it easier for small and medium-sized enterprises (SMEs) to get bank loans via the Commercial Data Interchange (CDI).

The CDI, which was launched in October 2022 as part of the HKMA’s Fintech 2025 strategy, is a financial data platform designed to make it easier for businesses, especially SMEs, to access financial services. The CDI had facilitated over 71,000 loan applications totalling HK$58.1 billion (US$7.5 billion) for SMEs until the end of September.

“Think of a wonton noodle shop that could use the CDI to share its historical turnover data from point-of-sale terminals with a bank, which could then use this alternative data for a more accurate credit assessment and loan approval, all without requiring traditional collateral,” Yue said. “We are also advancing trade finance digitalisation through CargoX to support SME traders in a complex global trade landscape.”

Project CargoX is a public-private collaboration led by the HKMA to use cargo and trade data to improve trade finance.

The HKMA’s Faster Payment System has over 18 million users. Photo: Handout alt=The HKMA’s Faster Payment System has over 18 million users. Photo: Handout>

One of the HKMA’s first fintech initiatives was the launch of the Faster Payment System in 2018, with the platform currently boasting more than 18 million users. This was followed by licences for eight digital banks in 2019.

Even in a market with more than 150 lenders, these virtual banks had 3.4 million customers, with HK$77 billion in deposits and HK$29 billion in loans as of June, according to the HKMA.

To build on this decade of progress and solidify Hong Kong’s future position, Yue unveiled the Fintech 2030 road map this month. The five-year programme will launch more than 40 initiatives in four areas: data, artificial intelligence, resilience and tokenisation.

The city has also incubated some prominent fintech unicorns – start-ups with a valuation of at least US$1 billion – like Airwallex, HashKey Group, WeLab, Micro Connect and ZA Group.

Hong Kong currently has more than 1,200 fintech companies, a 10 per cent increase from last year, with the sector’s revenue expected to exceed US$606 billion by 2032, according to a recent report by the Financial Services Development Council.

The UK’s Revolut will add to the tally.

Revolut is a global disrupter with over 65 million clients and has a strong presence in the US, Europe and Asia, so adding Hong Kong was the next stop in the expansion, said Camilo Ramirez, head of financial services at Sia Partners Hong Kong, a consultancy.

“While Hong Kong looks like a saturated market, it still lags behind in digital capabilities compared with Europe and mainland China,” Ramirez said. “With the HKMA launching the fintech road map, Revolut would land in a perfect environment to bring its innovative capabilities to Hong Kong at a pivotal and exciting moment for the financial services industry.”

Alvin Kwock, co-founder of online insurer OneDegree. Photo: Handout alt=Alvin Kwock, co-founder of online insurer OneDegree. Photo: Handout>

One Degree’s Kwock said the conversations around fintech had continued to evolve at FinTech Week. Initially, it was about exploring the use of fintech, which later shifted to digital banks, digital insurance and virtual assets trading, before moving to AI this year, he said.

“Cybersecurity will be a key issue going forward as the city becomes a virtual-asset trading hub,” Kwock said.

Meanwhile, home-grown fintechs like WeLab have been using their early-mover advantage to good use by expanding in Southeast Asia.

WeLab serves 70 million customers via its WeLend online lending platform and two digital banks in Hong Kong and Indonesia, WeLab Bank and Bank Saqu, respectively.

“Positioned at the nexus of two major growth corridors – northbound to the Greater Bay Area and mainland China, and southbound to the rapidly growing and digitally transformative markets of Southeast Asia, Hong Kong acts as a natural springboard for regional fintech expansion,” said Simon Loong, founder and group CEO of WeLab.

Fintech has also transformed one of Hong Kong’s oldest banks. The 160-year-old HSBC has seen an increase in digital use across all banking transactions.

“We are already a fully digital bank, prioritising digital channels to deliver daily banking services and engage with our customers,” said Maggie Ng, CEO and head of retail banking and wealth at HSBC Hong Kong.

Ng said HSBC would take part in the HKMA’s Fintech 2030 projects. The bank had already introduced tokenised deposits for customers, and its digital asset platform, HSBC Orion, was used to launch the world’s largest digital bond issuance by the Hong Kong government this month, she said.

The bank recently launched HSBC Gold Token, a tokenised gold product for retail customers in Hong Kong.

Also this month, Hong Kong and Shenzhen launched a joint fintech action plan to promote cross-boundary financial innovation, setting a target of establishing over 20 fintech application scenarios by the end of 2027. Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, who signed the initial pact with Shenzhen, said the two sides would implement various initiatives to facilitate high-quality fintech development.

Paul Sin, chair of the web3 and technology committee for Greater China at CPA Australia, an accounting industry body, said Hong Kong’s Fintech 2030 initiative provided a clear road map for the next five years.

One element that Hong Kong needed to develop was a decentralised identity (DID) system, which would allow financial firms to easily verify users’ identities.

“Only when firms can easily verify clients’ identities using technology like DID can fintech solutions be both innovative and compliant,” Sin said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.