The cities' central banks have signed a fintech cooperation agreement that will foster collaboration on business referrals, joint innovation projects, information sharing and the exchange of expertise, Norman Chan, chief executive of the Hong Kong Monetary Authority said on Wednesday (Oct 25). The first joint project will be on trade finance, Chan said in a speech to open the HKMA Fintech Day.
In a media release in Singapore, Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS): "This is one of our more significant fintech co-operation agreements, given the extensive financial and trade linkages between Singapore and Hong Kong. We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres."
Financial technology has added a new dimension to the decades-old tussle between Singapore and Hong Kong for the position as Asia's premier financial centre, with both cities throwing hundreds of millions of dollars to help fund start-ups and build ecosystems conducive to innovation.
"Traditionally as a financial centre, there's that comparison between Singapore and Hong Kong," Roy Teo, head of MAS' financial centre development department, said in a panel discussion at the event. "But when it comes to fintech, this is where we recognise that there's a lot of need for collaboration between the regulators."
The HKMA event is part of the Hong Kong Fintech Week, which organisers say is expected to attract more than 3,000 executives. Singapore holds its fintech festival on Nov 13-17. Last year, both cities held similar conferences within a week of each other.
Chan said the regulators were in talks on cross-border infrastructure to connect the Hong Kong Trade Finance Platform with a similar structure in Singapore. Seven banks in Hong Kong have signed on to the HKTFP - an HKMA-led initiative based on distributed-ledger technology - to digitise and share trade documents, automate processes and reduce risks and fraud, Chan said. He did not name the banks.
"Technology is a game changer for the future of banking and payment services," Chan said. "It will differentiate winners from losers."
Fintech investments in Asia are poised to set a fresh record this year, according to a CB Insights report released this month. Venture capital-backed start-ups raised more than US$5 billion (S$6.8 billion) in 2017 through September, closing in on last year's US$6.3 billion, data from the research firm show.
Hong Kong chief executive Carrie Lam pledged several initiatives to boost the city's innovation and technology sector in her policy address this month, including HK$2 billion (S$349.2 million) to co-invest with venture capital funds in local technology start-ups.
Chan also unveiled fintech initiatives with the Office of Financial Development Service of Shenzhen in southern China, including a talent development programme and a HK$7-million award for the development of "outstanding fintech products and solutions" for financial institutions in both cities.
Hong Kong and Singapore, which have vied for supremacy as financial technology hubs over the past couple of years, have now decided to join forces.