Digital Finance Flourishing Amid Covid: Paul Chan

The Financial Secretary, Paul Chan, says technology innovations in finance have flourished in the time of Covid-19 in Hong Kong, as virtual financial institutions mushroom and digital payment systems gain popularity.

Giving an online speech on Monday for the opening of the annual FinTech Week conference, Chan said that 8 virtual banks and 4 virtual insurers, as well as a virtual asset-trading company, have been authorised or given an 'in-principle' green light to operate in the city.

Chan also noted that in the first seven months of this year, more than 20 Hong Kong-based start-ups have between them raised nearly US$500 million in virtual funding.

“Home to more than 600 ‘fin-tech’ companies and start-ups including eight Unicorns, Hong Kong is fast becoming the first choice among those looking to reach new clients, investors and markets in Asia,” Chan said.

He also said the average daily turnover of the digital “Faster Payment System” (FPS) has grown seven times since it was launched more than two years ago, to reach 426,000 real-time transactions a day in September. Some 6.2 million people have registered with the system.

The system connects banks and e-wallets and allows round-the-clock instant transactions in Hong Kong dollars and renminbi.

Chan said the government is planning to adopt the system.

“The government has also embraced the FPS for payment of fees and charges. Several government departments hope to accept FPS payments at counters and self-help kiosks before year-end. Online payment via the FPS is also being explored,” he said, adding the government will make sure privacy and security will not be compromised.

The FinTech Week is co-organised by the Hong Kong Monetary Authority, whose chief executive, Eddie Yue, said Hong Kong is among the Asian cities with the highest number of digital banks.

Yue said he believes they will not replace the traditional banking system but will make it better, lowering costs and improving customer experience.