Fintech Hong Kong http://fintechnews.hk - FintechNewsHK Mon, 12 Nov 2018 03:20:39 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 Ping An’s $US 15 Billion R&D Budget Could Help Them Stay Ahead in Healthtech http://fintechnews.hk/7595/insurtech/ping-an-hkma-blockchain-ai-cloud-insurtech/ http://fintechnews.hk/7595/insurtech/ping-an-hkma-blockchain-ai-cloud-insurtech/#respond Thu, 08 Nov 2018 04:34:54 +0000 http://fintechnews.hk/?p=7595 Ping An Group expects to invest $US 15 billion in technology R&D in the next decade in an attempt to stake out a lead in the financial services industry for

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Ping An Group expects to invest $US 15 billion in technology R&D in the next decade in an attempt to stake out a lead in the financial services industry for next 10 years

Each year the Group invests one percent of its revenue in the R&D of fintech and healthtech. Ping An has invested US$7 billion in R&D in the past decade.

According to the press release, the group has a “finance + ecosystem” strategy, which has so far helped it gain a significant chunk of the industry, particularly in the joint insurtech industry. Besides its own exploits as a group, Ping An is also one of the three key components that makes up ZhongAn.

Their higher investment into innovation and research may be necessary considering its insurance arm’s 7 percent net profit drop as of last October, marking it at 21.3 billion yuan in Q3 that ended in September, compared to its 22.9 billion in the same period of 2017.

Despite this, the group is still focused on maximising its opportunities for growth in the domestic market, with CEO Peter Ma characterising the region as having “the best growth prospects”.

The company’s ongoing strategies will focus on artificial intelligence, blockchain and cloud-based technologies.

This focus so far allowed the company a chance to cooperate with Hong Kong Monetary Authority to create a joint industry standard blockchain-based solution for trade finance. As of July this year, the platform is already functional and has already onboarded multiple banks.

Ping An has also won a coveted award during the 8th Wu Wenju AI Science & Technology award, which is often regarded as one of the highest awards for artificial intelligence in China for its Ping An Brain—a big data AI engine. 

The project, which lasted for approximately three years, launched its Crius smart recommendation system, OLATOP (its cloud-based solution), disease prediction, smart auto-dagame detection, service robots, and other products which were able to combine technological developments with application scenarios which also provided AI products and solutions across multiple fields of its interest.

Featured image via Chris on Flickr 

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14 Inspiring Female Founders in Hong Kong and South East Asia http://fintechnews.hk/7492/various/fintech-female-founders-hong-kong-south-east-asia/ http://fintechnews.hk/7492/various/fintech-female-founders-hong-kong-south-east-asia/#respond Wed, 07 Nov 2018 05:59:01 +0000 http://fintechnews.hk/?p=7492 Fintech has become a global phenomenon, especially in Asia where high Internet and smartphone penetration is creating fertile ground for fintech adoption. With Singapore and Hong Kong, two internationally renowned

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Fintech has become a global phenomenon, especially in Asia where high Internet and smartphone penetration is creating fertile ground for fintech adoption.

With Singapore and Hong Kong, two internationally renowned financial hubs, emerging as regional fintech leaders, it comes with little surprise that most of Asia’s up-and-coming entrepreneurs in the field are from these two locations.

To keep up with Asia’s budding entrepreneurs, we’ve compiled a list of some of the most inspiring women fintech founders who are transforming the financial landscape in the region:

Tan Hooi Ling, Co-Founder Grab, (Singapore)

Linkedin

Tan Hooi Ling

While her co-founder Anthony has always been the public face of Grab,  Hooi Ling played a pivotal role in co-founding Grab — in fact it was both of them that came up with their idea of Grab (known then as MyTeksi) during their time with Harvard Business School.

Grab has come a long way from its initial days as a ride-hailing app to its current fintech ambitions with Grab Financial which offers a full suite of services ranging from payments, loans and insurance.

You’ll be hard pressed to find anyone from South East Asia is not familiar with the name Grab.

Ayesha Khanna, Co-Founder and CEO, ADDO AI (Singapore)

Linkedin | Twitter

Ayesha Khanna is the co-founder and CEO of ADDO AI, an AI advisory firm and incubator. She has been a strategic advisor on AI, smart cities and fintech to clients such as SMRT, Singapore’s largest public transport company; Singtel, Singapore’s largest telco; SOMPO, Japan’s largest insurance firm; Habib Bank, Pakistan’s largest bank; and Smart Dubai, the government agency tasked to transform Dubai into a leading smart city.

She is also the Founder of 21C GIRLS, a charity that delivers free coding and artificial intelligence classes to girls in Singapore. In 2018, Khanna was named one of Southeast Asia’s groundbreaking female entrepreneurs by Forbes magazine.

Val Ji-hsuan Yap, Founder and CEO, PolicyPal (Singapore)

Linkedin | Twitter

 

Val Ji-hsuan Yap is the founder and CEO of PolicyPal, a free app that allows users to organize, and track, all their insurance products in one dashboard, and the PAL Network, a dual-layered protocol for financial assets. Founded in 2016, PolicyPal aims to help customers understand their insurance coverage better.

The startup was the first graduate from MAS’ fintech regulatory sandbox. Prior to PolicyPal, Yap worked at Allianz, PwC in London, and OCBC Bank in Singapore. She was recently named to Forbes’s 30 Under 30 list for Finance and Venture Capital, and is a frequent speaker at universities and conferences.

Elena Ionenko, Founder and Business Development, Turnkey Lender (Singapore)

Linkedin

Elena Ionenko is the founder of Turnkey Lender, a multiple award-winning SaaS platform offering an intelligent end-to-end solution for complete automation of the lending business in non-bank organizations and banks. Turnkey Lender supports all stages of the loan life cycle from application processing and automated decision making to collection and reporting, and can be used for consumer lending, microfinance, payday loans, auto loans, mortgages, SME loans, in-house financing, peer-to-peer (P2P) lending and other types of lending.

Khai Lin Sng, Co-Founder and CFO, Fundnel (Singapore)

Linkedin

Khai Lin Sng is the co- founder and CFO of Fundnel, a private investment platform for unlisted securities in growth stage and pre-IPO companies. The platform aims to democratize the way investors seek opportunities in the private markets, and help best-in-class unlisted companies raise capital efficiently. At Fundnel, Sng is responsible for supporting the deal committee in an advisory role specific to all incoming deals and investor relations. With over five years of experience in banking and private investments, she has worked for J.P. Morgan, Citibank, and CIMB-GK Securities.

Nalinee Chinowuthichai, Co-Founder and COO, InvoiceInterchange (Singapore)

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Nalinee Chinowuthichai is the co-founder and COO of InvoiceInterchange, a P2P invoice trading platform. The company’s aim is to help support business growth by allowing small and medium-sized enterprises (SMEs) to auction off invoices for immediate working capital. At InvoiceInterchange, Chinowuthichai oversees technology development and enhancement and ensures operational excellence. Prior to InvoiceInterchange, Chinowuthichai worked as project manager at HSBC Global Banking and Markets and Credit Suisse, both positions in the London, and as a business analyst at the National Australia Bank.

Nicki Ramsay, Founder and CEO, CardUp (Singapore)

Linkedin

Nicki Ramsay is the founder and CEO of CardUp, a payments company based in Singapore that enables individuals and businesses to use credit card for all their big payments such as paying rent to a landlord, taxes, suppliers or even payroll to employees. In doing so users get access to instant credit and rewards. A payment professional, Ramsay has a background in business development, consumer insight and analytics having worked in leadership roles at American Express across both Asia Pacific and Europe. She is seen as a thought leader in the fintech space, and often featured in media and events.

Annette King, Co-Founder, Galileo Platforms (Hong Kong)

Linkedin

Annette King is the co-founder of Galileo Platforms, a platform technology company serving the insurance sector. Using blockchain technology, the platform connects all participants in the insurance industry efficiently and in real-time. King has 26 years of experience in life insurance and wealth management including 10 years in P&L responsibility. Most recently, she served as Manulife Asia’s vice president of client experience, brand and communications and prior to that Manulife Singapore’s CEO. King is a qualified actuary, FIAA, BEc and FAICD.

Maggie Ng, Founder and CEO, FinEx Asia (Hong Kong)

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Maggie Ng is the founder and CEO of FinEx Asia, the first global fintech marketplace connecting Asian investors with global high quality and low volatility asset classes, including US consumer loans, an asset class that was traditionally dominated by global institutional investors and banks. Ng has close to 20 years of banking experience and held various senior positions in both business and risk management at Citibank. She also served as the Asia and EMEA head of unsecured lending at Citibank, and held senior positions at Ernst & Young (Australia) and Broken Hill Proprietary (HK) Ltd.

Maxine Ryan, Co-Founder and COO at Bitspark (Hong Kong)

Linkedin | Twitter

Maxine Ryan is the co-founder and COO of Bitspark, a cash in, cash out blockchain remittance platform for money transfer operators and individuals to send Asia-wide. Her startup has won international awards and is redeemed as one of the pioneers of the bitcoin/blockchain remittance space. Ryan is an advocate for blockchain technology having consulted and strategized with Fortune 500 companies, financial institutions, telcos and startups in the use case of the technology. She is an international speaker on the topic as well as a mentor to fintech startups. She frequently speaks at tech and finance events, can be see on BloombergLive and was selected for Forbes 30 Under 30, 2018.

Bianca Ho, Co-Founder and COO, Clare.AI (Hong Kong)

Linkedin | Twitter

Bianca Ho is the co-founder and COO of Clare.AI, which builds white label AI digital assistants to empower financial institutions to engage their customers in a natural and reliable way. Prior to founding Clare.AI, Bianca worked as a business development manager at OneSky and Zendesk, and a private banking analyst at JP Morgan. Ho is also the co-founder of Dotkids, a startup aiming to create a children friendly space online. She is an active youth advocate in Internet governance, and is one of the youngest members of the Multistakeholder Advisory Group in the United Nations Internet Governance Forum (UNIGF).

Rachel De Villa, Founder and CTO, Cropital (Philippines)

Linkedin

Rachel De Villa is the co-founder and CTO of Cropital, a crowdfunding platform that helps finance local Filipino farmers. Established in 2015, Cropital aims to improve the income and productivity of farmers through crowdfunding, providing scalable and sustainable financing. Through Cropital’s online platform, investors choose a farm or farms to invest in. Cropital manages the fund for the farmer making sure it goes to the right resources, assuring as well that investors will get a return on investment.

Winnie Chua, Co-Founder and Chief Product Officer, PolicyStreet (Malaysia)

Linkedin

Winnie is the co-founder and chief product officer at PolicyStreet, an insurtech platform that aims to make it affordable, simple to understand and easy to access private healthcare. PolicyStreet targets underserved markets in the insurance space, such as the poor, students and startups. The company also serves Millennials and Malaysia’s rising middle class. PolicyStreet won the best startup award at the Seedstars Summit in July 2017 in Kuala Lumpur.

Kristine Ng, Founding CEO, Fundaztic (Malaysia)

Linkedin

Kristine Ng Fundaztic

Kristine Ng is a director and the founding CEO for Fundaztic, one of the 6 P2P lending companies approved by the Securities Commission of Malaysia. Fundaztic’s call to fame is their 83% command of the disbursements to SMEs.

Prior to founding Fundaztic Kristine Ng was already a well-known figure in the financial services space, she held the position of Executive Vice President role in Credit Guarantee Corporation, which facilitates SMEs access to financing through its guarantee schemes.

Featured image credit: Edited from Freepik

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Sun Life Launches Same Day Insurance Claims Settlement Through its Mobile App http://fintechnews.hk/7565/insurtech/my-sun-life-hk/ http://fintechnews.hk/7565/insurtech/my-sun-life-hk/#respond Tue, 06 Nov 2018 10:00:30 +0000 http://fintechnews.hk/?p=7565 Sun Life announced today, a newly launched feature on the My Sun Life HK app which enable claims submissions from individual insurance clients to be approved and paid within 24

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Sun Life announced today, a newly launched feature on the My Sun Life HK app which enable claims submissions from individual insurance clients to be approved and paid within 24 hours.

The 24 hours approval will for now, be available only to hospitalisation and accident claims, which account for over 95% of all claims that Sun Life receives.

This new service is made possible through the company’s Straight-Through-Proccessing System and Faster Payment System (FPS) infrastructure by the HKMA and will be made available 12th December 2018 onwards

This move is perhaps in response to the myriad of insurtech players like WeSure and Blue recently entering the market with faster and more seamless digital services.

Sun Life’s General Manager, Belinda Au, acknowledges that technology is now an enabler that ensures they stay relevant with their clients and added that this new launch is the beginning of their digital journey; with better new services to be launched down the line.

In related news, Sun Life also shared that they will be launching SunSmart, a service designed to help their financial advisors to view client portfolios on the go.

The SunSmart service according to the insurer will also enable clients to complete the application process within 15 minutes, which it claims to be the fastest turnaround time in Hong Kong.

 

 

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Hong Kong Fintech Week 2018 – Day 5 Shenzhen Day Highlights http://fintechnews.hk/7549/various/hong-kong-fintech-week-2018-day-5-shenzhen-day-highlights/ http://fintechnews.hk/7549/various/hong-kong-fintech-week-2018-day-5-shenzhen-day-highlights/#respond Tue, 06 Nov 2018 06:56:00 +0000 http://fintechnews.hk/?p=7549 Hong Kong Fintech Week, arranged by Invest Hong Kong (InvestHK), wrapped up on Friday with Shenzhen Day, a first-ever cross-border fintech event, attended by several hundred delegates for discussions and

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Hong Kong Fintech Week, arranged by Invest Hong Kong (InvestHK), wrapped up on Friday with Shenzhen Day, a first-ever cross-border fintech event, attended by several hundred delegates for discussions and speeches before departing to visit the offices of Tencent, WeBank and ZhongAn.

Hong Kong SAR Secretary for Financial Services and the Treasury, Mr. James Lau, gave welcoming remarks and mentioned that, with the recent opening of the high-speed rail link between Hong Kong and Guangzhou, as well as the Hong Kong-Zhuhai-Macau Bridge, there will be increased business activity and interaction between people in the three regions.

James Lau

James Lau

(For the full text of Mr. Lau’s speech (only available in Chinese), click here)

Mr. Lau said that Hong Kong hopes to further improve the financial support services in the Bay Area to enable a seamless experience to people in the region when traveling, shopping and living their daily lives, adding that this extends to general banking services and financial management. To achieve this, he said, fintech has a very important role to play.

Speaking in Shenzhen, Mr. Lau continued that Hong Kong and Shenzhen are co-developing the Innovation and Technology Park in the Lok Ma Chau Loop, in an area occupying 87 hectares located just across from the border, with the intention of providing the first land for developing industry facilities by 2021.

“It will bring unprecedented development space and opportunities for the innovation and technology industry in Hong Kong and Shenzhen,”

Mr. Lau said. It will attract top enterprises, R&D institutions and universities to come here, bring together global scientific research talent, and build the Bay Area into an international innovation and technology hub.

Calvin Choi, Chairman of AMTD, which made several announcements during the course of the week on partnerships with mainland companies, said:

“As a financial center, Hong Kong will need to collaborate with cities in the Greater Bay Area. By doing that, I’m sure that the Greater Bay Area can meet the Chinese government’s ambition of becoming a world leader in AI (artificial intelligence) by 2030. This is a goal that I think is achievable.”

Simon Young, Senior Director of Tencent Financial Technology, Hong Kong, Macau & Cross-border Financial Affairs, said: “AI, big data and cloud computing and data analytics comprise a new form of infrastructure, and Tencent will use these to become a better connector and creator of ecosystems. The Greater Bay Area is a business center that we’re focusing on.”

Mr. Young mentioned that Tencent offers a platform that enables R&D to be put to practical use with real-life situations, where the talent can see their work and effort develop into tangible outcomes, including one that can go to market. He added that education, training and talent recruitment are increasingly regarded as the key factors for the businesses in the Greater Bay Area in order to go global.

Ken Lo, Founding Member of ZhongAn Technologies International, said:

“We see Hong Kong as a launching pad for our business to go global, so we established an office in Cyberport in Hong Kong. I believe the most important aspect of cross-border collaboration is the synergy and mixing of culture and talent between the cities.”

As an example of how ZhongAn uses its financial technology, Mr. Lo described its use in farming.  “One of our case studies relates to on-the-ground farming use where our blockchain technology to help address food safety issues,” he said. “This which creates real value to society.”

Mr. Lau, along with about a third of the attendees, visited the Tencent office during the afternoon. The other delegates visited ZhongAn and WeBank.

HKFintechWeek

 

You can check Hong Kong Fintech Week 2018 Highlights here:

Day 1 Highlights

Day 2 Highlights

Day 3 Highlights

Day 4 Highlights

 

Featured image credit: Edited from Unsplash

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What Hong Kong’s Regulator Has to Say About Their New Cryptocurrency Regulation http://fintechnews.hk/7509/blockchain/sfc-hong-kong-cryptocurrency-ico-regulation-exchanges-trading/ http://fintechnews.hk/7509/blockchain/sfc-hong-kong-cryptocurrency-ico-regulation-exchanges-trading/#respond Mon, 05 Nov 2018 14:28:49 +0000 http://fintechnews.hk/?p=7509 When you bring up blockchain with enthusiasts nowadays, the tone of conversations usually involves them making excuses for cryptocurrency, and a plea to not let that stain your impression of

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When you bring up blockchain with enthusiasts nowadays, the tone of conversations usually involves them making excuses for cryptocurrency, and a plea to not let that stain your impression of the underlying blockchain technology.

This is a marked shift in mindset from just one year ago, when there were excited whispers about cryptocurrency potentially replacing fiat currencies altogether.

The global obsession with cryptocurrencies have cooled somewhat, but Hong Kong still serves as a hotbed of activity and seen as one of the world’s premier trading regions—particularly so once the mainland decreed cryptocurrency as illegal.

Hong Kong is also the home of well-known cryptocurrency exchanges like OKEx and BitMEX.

This was perhaps why Hong Kong raised $223 million in proceeds across 20 closed ICOs with 15 more in the pipeline as of last June. While it trails behind Singapore, Hong Kong is considered one of the bedrocks of cryptocurrency and ICO in Asia.

So SFC Looks to Encourage That China Cash

Hong Kong Cryptocurrency

Fast forward to today, and in line with Carlson’s statement as the ex-chairman of the Securities and Futures Commission of Hong Kong (SFC), the regulations are mainly considered to protect investors, and perhaps help curate the ecosystem and moving developments to one that the authority approves of.

This decision did not come lightly for Hong Kong. Just a few weeks ago, the outgoing chairman described investor protection as the key reason behind the authority’s move to regulate.

But to do so, the SFC had to first get the Hong Kong government to recognise the asset as a security—one of the big loopholes that prevented effective regulation before.

It will boost investor protection and hence attract more mainlanders to trade cryptocurrency assets in Hong Kong,” said Gary Cheung, chairman of Hong Kong Securities Association. “This will help Hong Kong to be among the top cryptocurrency trading centres worldwide because proper regulation is very important for attracting the big players.”

Three of the most important developments are:

  • Only professional investors should be allowed to participate in the scene for the time being, acording to SFC
  • Fund managers that invest more than 10% of their assets in virtual currencies will need a license by the SFC
  • Trading platforms for professional investors can join a sandbox subject to anti-money laundering, and other laws
Securities Watchdogs Across The Globe Decree Cryptocurrency Not A Threat—Yet
Ashley Alder - SFC Hong Kong Cryptocurrency

Ashley Alder

In a talk at the Hong Kong Fintech Week 2018, Ashley Adler,  CEO of the Securities and Futures Commision, revealed that the potential conduct and market integrity risks of crypto-assets, or virtual assets, are now one of IOSCO’s top priorities.

IOSCO here refers to The International Organisation of Securities Commissions, a collection of different securities watchdogs across the globe that bands together to develop, implement and promote benchmark standards for regulation.

And the association, according to Ashley, makes this verdict based on “a report by the Financial Stability Board (FSB) this summer concluded that, despite some concerns, virtual assets, and platforms used to trade them did not—as yet—pose a threat to global economic or financial stability”.

This perhaps hints that any regulations announced now are subject to changes along the way as cryptocurrency moves forward, especially if more people begin to use it.

The same reasoning is perhaps why recently, another member country of the IOSCO, Malaysia, announced that they are looking into potential regulations as well.

Regulations Will be Focused on Two Key Tenants: The Assets and The Platforms of Exchange

binance cyrptocurrency regulation hong kong

The first, as described by Ashley, are virtual assets. In his talk, Ashley specifically described virtual asset portfolio and management and distribution, where those who intend on investing more than 10% of a mixed portfolio in virtual assets will need to observe new requirements targeting crypto-assets, no matter if they count as securities or futures contracts.

“However, I should be clear that our reach will still not extend to managers of pure crypto funds.”

As such, the SFC aims to fill the gap with further regulation of fund distributions as long as it has crypto-exposure, by imposing expected standards when firms distribute virtual asset funds.

Things become a tad tricky when there is an attempt to regulate crypto exchanges.

“We are not yet sure that virtual asset trading platforms are in fact suitable for regulation. They are technically, structurally and qualitatively different from traditional stock and futures exchanges. Our aim here is to explore how they might be regulated and then form a more
definitive view after this exploratory stage,” said Ashley.

This was the reasoning behind the opt-in crypto-sandbox introduced. No formal regulatory approval will be given to an oprator yet, but the regulator will be closely monitoring the operations of the platform to best figure out standards for regulation.

The hope is that investors will still benefit if they can observe platforms that want to be supervised by SFC are set apart from the others in the market.

Fintech News is still concerned that the authority might decide to axe cryptocurrency exchanges altogether though, as according to Ashley, “we are unsure at this stage whether platforms can satisfy our expected anti-money laundering standards”.

“This is because anonymity is a core feature of blockchain, which is the underlying technology for virtual assets. We also need to be alive to the rapid evolution of the whole crypto industry as well as developments in the international regulatory community, including the work being done in IOSCO.”

“We Do Not Have a Lot of Options Here,” Said Ashley

cryptocurrency regulation hong kong sfc

“We could rely on an interpretation of our remit as a narrow one, view the whole crypto world as unregulated and rely on investor education to warn the public of the risks. But maintaining the status quo may not be an option if in reality investors are left unprotected as crypto activities thrive.”

“As such, we recently decided to step up as much as we are able to protect investors who trade virtual assets.”

It seems like the future is still not set in stone for cryptocurrency in Hong Kong and the general IOSCO, but observers of the space can begin to see how the scene might be moving and at the very least, what the regulators’ goals are.

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Hong Kong Fintech Week 2018 – Day 4 Highlights http://fintechnews.hk/7514/various/hong-kong-fintech-week-2018-day-4-highlights/ http://fintechnews.hk/7514/various/hong-kong-fintech-week-2018-day-4-highlights/#respond Mon, 05 Nov 2018 02:44:38 +0000 http://fintechnews.hk/?p=7514 The fourth day of Hong Kong Fintech Week, organised by Invest Hong Kong  at Hong Kong Convention and Exhibition Centre, continued at full tilt right to the very end, thanks partly

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The fourth day of Hong Kong Fintech Week, organised by Invest Hong Kong  at Hong Kong Convention and Exhibition Centre, continued at full tilt right to the very end, thanks partly to a regulatory announcement on cryptocurrencies and partly to the quality of the speakers and panel sessions. Day 5 sees the event go cross-border as it takes the high-speed train to Shenzhen for the first time.

The day started with keynote speech by Ashley Alder, CEO, Securities and Futures Commission (SFC), on the main stage started proceedings Thursday with a speech that gave context for an important SFC announcement on cryptocurrencies later in the day. He also reminded the audience of the SFC remit and approach to regulation.

Ashley Alder

Ashley Alder

(For the full text of Mr. Alder’s speech, click here; and for details of the SFC’s new regulatory approach for virtual assets, click here.)

Mr. Alder said the SFC takes a facilitator approach to innovation, but adopts a “far more cautious stance” where risks arise, particularly when it comes to crypto assets, which have come under spotlight among international regulators.

“There are some risks inherent in the very nature of the virtual assets themselves. They have no intrinsic value and are generally not backed by physical assets. They are not guaranteed by any government,” Mr. Alder said. “They are not currency.”

Mr. Alder said it is too early for Hong Kong legislate new laws to regulate crypto assets and exchanges, which are “changing too fast” and lacking in international consensus on regulatory framework.  However, he said the SFC has decided to step up to protect the sizeable pool of Hong Kong investors within its existing legal remit.

The SFC said those fund managers supervised by the SFC who intend to invest more than 10% of their portfolio in virtual assets will need to observe the regulatory requirements for cryptocurrency irrespective of the amount of securities and future contracts in the said portfolio. This will not extend to fund managers of pure crypto assets funds.

The SFC issued another statement on how to regulate virtual assets trading platforms, or crypto exchanges, with many of the most active in Hong Kong.  Unlike crypto-asset funds, a significant part of their trading activities do not fall within the regulatory parameters of SFC, or any other local regulators.

“We are still not sure whether virtual assets trading platforms are suitable for regulation,” Mr. Alder said. “They are technically, structurally and qualitatively different from the traditional stock and future exchanges.”

The SFC announced it will use the SFC Regulatory Sandbox to monitor the activities of virtual assets exchanges. The aim to explore how they should be regulated. “I believe that their conduct, resilience and financial soundness should be the same, if not higher that the existing automated trading platforms such as dark pool,” Mr. Alder said.

The goal, he said, is to set up framework for potential regulation and licensing, and to pave the way for providers that have “the willingness and ability to keep to high standards.”

The jury is still out on whether virtual asset still serve a useful social function. But they should be held to the same standards as other assets. It is too early to set a legal framework for it. International consensus on legal standards is year to emerge.

Mr. Alder said the SFC will be announcing a regulatory framework for robo-advisory in April next year.

China Fintech Summit – Lufax CEO in Fireside Chat

A key theme for the day was China. The so-called China Fintech Summit kicked off with a fireside chat between Greg Gibb, Co-Chairman and CEO of Lufax and Shai Oster, Asia Pacific Editor of The Information. Mr. Gibb said seven-year-old Lufax has 35 million registered customers, with 10 million active ones. He said about a third of its investors come via the Ping An ecosystem, a third from online searches and browsing, and a third via word of mouth.

Greg Gibb, Co-Chairman and CEO of Lufax and Shai Oster

Mr. Gibb said while it started as a peer-to-peer (P2P) lender, it has moved on and is now essentially a curator of financial products, so customers can decide how they want to invest. Its fastest growing products over the past two years are alternative investment products. He said he noted growth in demand for equity products.

He said Lufax remains 99% a China play, but it is heading overseas. Earlier this year, he said China’s regulator finally outlined 108 criteria for a compliant platform, with the ones on banks to ensure compliance – Lufax works with PingAn Bank and 20 other banks. “Finding a bank to work with raises the bar – a challenge for many companies,” said Gibb.

Mr. Gibb estimated the size of the market to be worth about RMB 1.5 trillion (US$2 billion), making up about 3% of China’s financial sector. He added that in 4-5 years it will be 10%. Commenting on the driving forces, he said that retail banking is relatively young in China (“about 15 years”), so there are none of those 20- to 30-year relationships between customer and bank that you see in the west, making the market more receptive to new types of player.

Traditional banks that understand technology, have financial DNA and focus on retail will be major players. “Fintech is a race to get that right,” he said. “The hardest part is the culture. You can hire tech guys and industry know-how, and then you’ve got to get them to work together.”

Commenting on a big theme of the day, Mr. Gibb gave a zero to cryptocurrencies – Lufax has no plans there. He was bullish on blockchain, though, saying it will significantly increase transparency.

Hong Kong Fintech and the Greater Bay Area

Charles d’Haussy

Charles d’Haussy

Charles d’Haussy, Head of Fintech at InvestHK, presented on Hong Kong, setting it in the context of the Greater Bay Area. He said that Hong Kong’s fintech sector has grown organically driven by the private sector and supported by the government, making it very resilient, he said.

Mr. d’Haussy listed a string of recent developments such as the Faster Payments Service, common QR code, blockchain trade finance infrastructure launched with 21 banks, and 29 companies reported to have applied for virtual banking license. He also spotlighted Hong Kong’s tech voucher scheme which offers HK$200,000 to Hong Kong SMEs to buy technology.

Financial Inclusion with Grab Financial, PayPal and International Agencies

The morning featured a session on financial inclusion. Reuben Lai, Managing Director, Grab Financial spoke about how Grab created more than one million bank accounts for drivers over the past six years – driver who were previously locked out of the financial system. The drivers, he said, act as agents – they drive but also act as mobile ATMs and mobile branches.

He said Grab had helped empower 8 million micro-entrepreneurs across 50-plus cities, typically helping them to increase revenues 30%-50%. He said that through data and insights, Grab can make loans with low risk and significantly lower interest rates.

Richard Nash, Vice President and Head of Global Government Relations at PayPal said the company has 254 million active accounts. He said fintech advances haven’t reached a huge number of people – there are still 1.7 billion unbanked, with 85% of transactions by cash or cheque. He added at more than 200 million business are financially excluded and, in the US, one-in-three households underserved by the financial system.

Legacy infrastructure, the difficulty reaching remote areas, collateral needs, interest rates, regulation and other things all hinder economic growth and opportunity.  “Tech innovation should go further,” he said. “The good news is that two-thirds of the unbanked have mobile phones.” This can help drive not just financial inclusion, but also financial health, such as insurance, investment for education or retirement.

In a panel session that followed, Jaspreet Singh, Digital Finance and Innovation at the UN Capital Development Fund, said fintech and financial services are not an end in themselves. “Tech shouldn’t be centre stage, it’s an enabler,” he said. “The focus should be on consumer. Usage is important – dormant accounts are no good.

Rachel Freeman, Financial Institutions, APAC, International Finance Corporation, stressed that it’s important to help people to get the right type of finance. “Deposits and saving are more valuable than credit – something that’s often forgotten with financial inclusion.” She disagreed that some new players are exploiting the situation, saying some business models are not so good and worst ones will get crowded out. “It’s all normal for a new industry.”

Regulation needed for cryptos

Ken Lo, CEO of Branding China Group

Ken Lo

In the early afternoon on the AMTD stage, talking about digital assets, Ken Lo, CEO of Branding China Group, gave his perspective on where the sector is heading.  “In the future, it will touch every part of our lives,” he said. “That is why collaboration and effective regulation globally will be crucial for this to be integrated smoothly.”

Having commented on regulatory developments in Japan and the company’s involvement there, Mr. Lo added: “We absolutely understand what the regulators need.  We need the same thing too. We all want the market to be secure, liquid, transparent and efficient… Without that, the market can’t grow. What we’d like to have is an opportunity to collaborate and bring our industry experience to help create effective regulation.”

 AMTD, Tiger Broker announce strategic partnership

On the Hong Kong Stage in the afternoon, AMTD Group announced the establishment of its strategic partnership with Tiger Broker on capital markets services and technological innovation.  Calvin Choi, Chairman and President of AMTD Group, and Mr. Wu Tianhua, CEO and Co-Founder of Tiger Broker, signed the agreement for a partnership that aims to bring disruptive changes to the securities brokerage and investment banking industry, generating a better user experience for global capital markets clients and helping to upgrade traditional financial services.

Open APIs panel discussion

Regulators and experts from UK, Australia and Hong Kong congregated for a panel session on open APIs.

Open APIs panel discussion

Imran Gulamhuseinwala, Implementation Trustee, UK Open Banking which is responsible for implementing a unified set of API standards across the banking industry, described the process as painful despite the positive outcome. “There is a saying that the pioneers are those who take the arrows,” he said.  “We have learnt an awful lot. I would urge Hong Kong to leverage other countries’ experience. You will find that banking around the world is not so different.”

One of the most painful experiences was how the UK had underestimated how difficult it was for banks to implement the API standards and how much central infrastructure needed to be built. It included how banks train the middle office, how to resolve disputes with customers in this more complicated system, and how to screen third parties.

“We have learnt that implementation is a big deal. It is not just about technical standards, but also about customer experience standards which need to be brought alongside,” he said.

He added that it is important to have regulation, and for there to be a single standard regarding APIs so that they lower the entry barrier for innovation – big and small banks alike would then have access to the same pool of offerings from third-party providers.

Scott Farrell, Chairman of the Australia Open Banking Review, shared how Australia utilised APIs to open a cross-sector data-sharing framework. Such a data ecosystem, he said, cuts through banking, energy, telecommunications and every aspect of life in order to offer customer choice, convenience, and confidence in the soundness of the ecosystem.

Participating banks, corporates and institutions in the system can offer customers better products and services. “Our vision is to build up a competitive data economy in Australia so that we become price-makers instead of takers,” he said, adding that banks can gain customer information from other industries, meaning they can provide services beyond their own.

Harjeet Baura, Financial Services Consulting Leader, Hong Kong, Partner, PwC, said regulator-driven, mandated open banking, such as in Japan and the UK, and market-driven open banking developments, such as in the US and Singapore, both have their merits. He said that traditional banks could no longer afford to hold onto their traditional business models – they need to think beyond just banking in terms of profits and fees. For example, banks should look less at fees from banking products and services, but more at referral fees as they become part of an open banking system that directs and generates business for everyone on board.

Angel Ng, CEO, Citi Hong Kong and Macau, welcomed the concept of open banking and API standards with open arms. “Why banks need to adapt open APIs? The reason is very simple: banking is very boring. Banking is no fun. Banking is transactional in nature, and the question is how do we offer this professional service without interrupting your life.”

She said they didn’t want to drag customers to their site, but “go to where customers hang around and make ourselves invisible so that they go through their life comfortably without feeling our existence. That is why we want to use open APIs, as it enables different partners to get involved to innovate to make banking part of the everyday process.”

Ms. Ng agreed that the implementation is a pain. Internally, she needs to convince her own people. “I cannot answer what is the financial benefit of using APIs, but I do believe that if we put our eyes on the customer and client journey, you create a lifetime relationship with your clients which is of far greater value.”

Sebastian Paredes, CEO, DBS Bank Hong Kong, pushed for another kind of level-playing field – he said the HKMA should also regulate fintech companies, holding them up to the same set of standards as the rest of the financial industry.

He also pushed back on the HKMA’s API initiatives, arguing that banks need to decide what they want.  “As a bank, DBS has been working with third-party providers to create value. We need to create our own ecosystem based what we want. If suddenly have an array of third parties knock on our door to drain our data, we cannot reciprocate,” he said.

China Fintech Summit – eight questions (and answers)

Late afternoon, the China Fintech Summit resumed with a panel discussion preceded by a short presentation by Paul Schulte, Founder and CEO, Schulte Research. He posed eight questions… and gave some answers:

1.        Q: Do we need AI to correct human bias?

A: Yes, because without it you get group-think, fear of authority, lack of imagination, polite is good and hyper-rationale (I cannot fail) plus other things. China is ahead on AI.

2.        Q: What kind of AI do we need?

We want it to be independent, logical, offering full vision, objective, without emotion and so on. “We would hate AI if it were a person.”

3.        Q: Is blockchain bullshit?

A: No. It’s free and it will succeed. It offers transparency and can become an auction house for anything that moves. It’s verifiable, immutable, traceable, automated, low cost, decentralized, IOT connected, secure etc. China is ahead.

4.        Q: Are Alibaba/Tencent the financial glue for One Belt One Road?

A: Yes, this is what we see from their footprint across the OBOR markets. Alibaba’s capex is “5x HSBC and 10x Standard Chartered.” Tencent is similar, he said, but taking smaller bets.

5.        Q: Will Amazon export India success to dominate GEMS?

A: Yes. Agriculture and agritech will be big buzzwords in 2019 and Amazon will lead the way and will take on the “cartel” that is the ABCD group (ADM, Bunge, Cargill, Dreyfus).

6.        Q: Will we need two of everything?

A: A bifurcation of technology is possible. The White House is taking out the old Cold War playbook. “We’re in an echo-chamber. The rhetoric and action will get more aggressive, not less.”

7.        Q: Is quantum computing equivalent of splitting the atom?

A: Yes, 1024-bit RSA encryption would take the fastest computer millions of years to crack. “Quantum computing can do it in 24 hours.” China leads on quantum computing.

8.        Q: Where is this going?

A: The US has a US$827 billion defence budget, making the Pentagon the world’s 19th largest economy. In China, the five-year plan is fixed; it can’t deviate and that could be restrictive.

China Fintech Summit – panel on US-China trade and other topics

The panel’s subject was The Future Role of China in the Global Financial Technology Industry.

Jing Ulrich, MD & Vice Chairman of Asia Pacific, JP Morgan Chase said China leads the world in mobile payments. It’s now a cashless society. “Mobile payments have been growing at 40% a year over the last five years,” she said. “Even beggars on street don’t accept cash.”

She said that 90% of payments go through Alibaba and Tencent, and these companies are traveling overseas with Chinese travelers (150 million last year) and establish overseas, such as in Cambodia, Thailand and Philippines, all of which accept AliPay and WeChat Pay.

She said that AI and fintech are gravitating towards Asia from the West, and that China will lead for four reasons: abundant data, work ethic, expertise and massive government support. “If data is oil, China is Saudi Arabia,” she said, adding that it’s quality data that’s not fragmented like in the US, because it’s mostly owned by Alibaba and Tencent

Ting Li, CEO of Yunfeng said traditional financial institutions are waking up to fintech, while fintechs are seeing that the B2C model doesn’t work. “They need to partner.” Commenting on the trade dispute between the US and China, she said that: “China has priced in a long-term friction. It’s not about the trade deficit, it’s about competition going forward. In the US, they may not have adjusted to the impact of the trade war.”

Daniel Yu, ex-Group CIO, Ping An, added to Ms. Ting’s comment that the US has US$21.5 trillion of debt, much of it held by China. Meanwhile, China’s debt stands at 278% of GDP which is huge. The impact of a trade war could be profound with the protagonists in straight jackets. The collateral damage is likely on the Belt & Road footprint, he said.

Looking forward, Mr. Yu said payments are unsexy, China has set the standard. “It skipped over [payment] cards and it now accounts for three-quarters of online lending.” Commenting on insurance, he sees China taking a lead in automotive and transport, healthcare and logistics.

He added that auto insurance will be interesting down the line with driverless cars, because the censors and data-gathering tools will belong to the automakers, who will, therefore, own the data. This would have ramifications for the insurers.

China is often criticized for inefficient use of capital – too much going to government-backed and risk-free state-owned enterprises at the expense of nimble innovative up-and-coming companies. Mr. Yu observed that in China they can now define risk based on data, and so redistribute capital more effectively on a large and micro level – to farmers or migrant workers.

Ms. Ulrich said, “the trade friction is really about future dominance in tech sphere.” China has its vulnerabilities in that it has been long reliant on US semiconductors. Now Chinese companies are beginning to build AI chips. “So, the trade tensions may actually accelerate China’s tech development,” she said. “There may be two parallel ecosystems [down the line].”

Fireside chat on AI with Dr. Kai-Fu Lee

The day ended on a high with a fireside chat with Dr Kai Fu-Lee, founder and CEO of Sinovation Ventures, a Chinese venture capital firm that manages US$2 billion of AUM, and over 300 portfolio companies across the tech sector in China and US.

Dr. Kai-Fu Lee, Founder and CEO, Sinovation Ventures, one of the leading VC funds investing in technology companies in both China and the US, particularly in AI. It currently has an estimated US$2 billion AUM.

When comparing AI in China and the US, Dr. Lee said China has more data and entrepreneurs who are better and faster. The US, on the other hand, is much better in research than China.

When asked about whether Sinovation Ventures solely focuses on investing in Chinese companies, he said: “In an ideal world, we will invest in companies with US technology, China entrepreneurs and China data. However, if the US is intent on trade war, we will focus on investing on Chinese companies because that is the environment.”

Dr. Lee is very much against the view that AI may replace the human workforce or have its own free will and threaten to overrule human society. He pointed out that there had only been one breakthrough – deep learning – over a 65-year period of AI development and that was 10 years ago. He said it would take at least 20 more breakthroughs for such ideas to be feasible.

But he noted that AI would have the potential to displace jobs which are routine and single-domain – similar to jobs done by about 50% of people.  He was also mindful of the undesirable side-effects of AI applications.

 

You can check Hong Kong Fintech Week 2018 Highlights here:

Day 1 Highlights

Day 2 Highlights

Day 3 Highlights

 

Featured image credit: Edited from Unsplash

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Hangzhou Pushes Blockchain, Fintech Innovation http://fintechnews.hk/7428/china/hangzhou-blockchain-fintech-innovation/ http://fintechnews.hk/7428/china/hangzhou-blockchain-fintech-innovation/#respond Sun, 04 Nov 2018 16:55:11 +0000 http://fintechnews.hk/?p=7428 Hangzhou, one of China’s top fintech hubs, is pushing for blockchain innovation. Xu Liyi, mayor of Hangzhou city, has listed blockchain development into the official government report and several initiatives

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Hangzhou, one of China’s top fintech hubs, is pushing for blockchain innovation. Xu Liyi, mayor of Hangzhou city, has listed blockchain development into the official government report and several initiatives have been undertaken by the government to nurture a healthy blockchain ecosystem.

Bitcoin, Blockchain, Cryptocurrency, Pixabay

Image: Bitcoin, Pixabay

The Hangzhou government said in April that it would invest in a 10 billion yuan (US$1.6 billion) blockchain fund. At the opening ceremony of the Blockchain Industrial Park, it said it would invest 30%, or 3 billion yuan, in the fund along with Tulan Investment, a venture capital company. The fund, which claims to be the world’s biggest fund investing in blockchain projects, will be managed by Tulan and INBlockchain.

Hangzhou, the capital of Zhejiang province in eastern China, has previously said it had identified blockchain, along with artificial intelligence, quantum technology, biotechnology and life sciences, as a key growth area. According to the government, in 2016, Hangzhou’s economy was driven by information technology, which contributed with more than 50% of its overall gross domestic product growth.

Hangzhou has a long history with blockchain technology and cryptocurrency. 8bit, a leading information portal in China, was formally established in 2013 in Hangzhou. As 8bit expanded its influence in the community, Hangzhou became one of the most important city for blockchain enthusiasts who would gather and hold seminars.

Hangzhou-based VC Tunlan Investment is an early backer of Canaan Creative, a computer hardware manufacturer and one of the biggest cryptocurrency miner manufacturers in China. This deal helped build up the position of Hangzhou in the Chinese blockchain venture capital community.

After getting the investment, Canaan Creative moved to Hangzhou. In May, it filed for a US$1 billion Hong Kong initial public offering (IPO).

 

Fintech developments in Hangzhou

Hangzhou, the hometown of Alibaba Group Holding, China’s largest e-commerce company, has witnessed a rapidly evolving fintech ecosystem with several key developments occurring in recent months.

According to domestic media reports, fintech enterprise Aicai Group is another Hangzhou company in the space looking to launch its IPO in Hong Kong next year. Aicai Group CEO Qian Zhilong said that the company’s latest valuation excessed US$1 billion.

Aicai Group specializes in the provision of consumer finance services to younger generations. It has created a services portfolio of “financial ecosystem + fintech + asset management.” The company currently provides around a dozen different product lines, concentrated in the four areas of wealth management, consumer installment financing, small and micro-financing and automobile financing.

As Hangzhou is quickly making a name for itself on the global fintech scene, the city is attracting an increasing number of event organizers.

In July, TechCrunch International Innovation Summit gathered over 150 exhibitors and more than 8,000 attendees in Hangzhou to talk about future trends and new products.

 

Ant Financial updates

Headquarters of Alibaba Group in Hangzhou, Wikipedia

Headquarters of Alibaba Group in Hangzhou, Wikipedia

During the two-day summit, Zhang Hui, director of Ant Financial’s blockchain department, revealed the company’s initiatives in blockchain technology, specifically its focus on developing the consortium chain. He expressed his hopes that blockchain will create new business models for the company rather than simply provide value-added services.

Hu Xi, Deputy CTO of Ant Financial and partner of Alibaba Group, spoke about Ant Financial and the company’s future plans for globalization. Ant Financial expects to serve more than 1,000 financial institutions in the next three to five years, and accelerate the pace of opening up all Ant Financial’s businesses including Ant Check Later and Yu’e Bao.

In June, Ant Financial raised US$14 billion in what is believed to be the world’s largest-ever single fundraising. The Series C round pushes Ant Financial’s valuation up to US$100 billion, according to Bloomberg, making the Hangzhou-based company the world’s largest fintech firm.

Ant Financial is a key fintech player in China where it claims to serve over 500 million consumers. Globally, the company’s footprint exceeds 870 million consumers.

In recent years, Ant Financial has made investments and set up joint-ventures and new businesses in a slew of Asian countries that include India, Thailand, South Korea, Indonesia, Hong Kong, Malaysia, the Philippines, Pakistan and Bangladesh.

The firm posted a US$1.4 billion profit over the last year.

Besides Ant Financial, other notable fintech firms from Hangzhou include risk management services provider Tongdun Technology, bookkeeping services provider Wacai, and 51 Credit Card, a liability management, financial and technology services provider.

 

Featured image: Qianjiang CBD in Hangzhou, Wikipedia.

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Hong Kong Fintech Week 2018 – Day 3 Highlights http://fintechnews.hk/7479/various/hong-kong-fintech-week-2018-day-3-highlights/ http://fintechnews.hk/7479/various/hong-kong-fintech-week-2018-day-3-highlights/#respond Thu, 01 Nov 2018 06:00:30 +0000 http://fintechnews.hk/?p=7479 Day 3 at Hong Kong Fintech Week at Hong Kong Exhibition and Convention Centre was buzzed with energy as the three stages hosted speeches and lively panel sessions to full houses,

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Day 3 at Hong Kong Fintech Week at Hong Kong Exhibition and Convention Centre was buzzed with energy as the three stages hosted speeches and lively panel sessions to full houses, while the numerous fintech company booths attracted delegates amid the hubbub of meetings, photos, interviews and networking.

Paul Chan

Paul Chan

The day opened with a keynote speech given by Paul Chan, Financial Secretary, HKSAR Government, who highlighted Hong Kong’s strengths recent developments in fintech and discussed the city in the context of the Greater Bay Area.

“Some people already call Shenzhen the Silicon Valley of China.  Imagine placing Silicon Valley next to New York City?”

asked Mr. Chan, referring to Hong Kong neighboring Shenzhen. In this context, he noted the new tagline for InvestHK as capturing the essence of what Hong Kong offers to fintech companies looking for a base in Asia: Launch, Leap, Lead.

It was fintech galore with a focus on regulation for much of the day, thanks to the Hong Kong Monetary Authority (HKMA) shaping part of the programme. A highlight of the morning session was a ceremony to launch eTradeConnect, the HKMA’s blockchain trade finance platform. The ceremony included a symbolic dandelion – the seeds of which blow far and wide, like the seeds of business from the platform – and the 18 corporates involved.

HKMA hosts CEOs for panel discussion

Norman Chan, Chief Executive of the HKMA took the stage after a presentation by Calvin Choi, Chariman of AMTD Group. Norman Chan stressed that “technology and processes are equally important,” and noted the friction between convenience and trust. His comments echoed one of the key themes of the week: the balance between product-centric and customer-centric.

panel discussion

Mr. Chan went on to moderate a keenly awaited CEO panel session involving Eric Jing, CEO of Ant Finance, Jessica Tan, COO and CIO of Ping An Group, Benjamin Hung, Regional CEO of Standard Chartered Bank and Stephen Bird, Global CEO of Citi.

Ms. Tan said the challenge is to get financial services integrated with lifestyle, so that it’s not a chore. She said that for real change, “front-, middle- and back-office change is needed.” To do that, she added, you need to change every process and mindset to get people to work together.

She illustrated capabilities that are transforming insurance. “

In China last year, we processed 11 million car accident claims. Of these, 98.7% were paid within a day, 60% were done with self-service, where the users submitted a picture of the incident and got the payment settled automatically.”

She added:

“It took us three years and 10,000 people working on it to train machines to recognise 25 million different car parts and identify real from fraudulent claims.”

Benjamin Hung of Standard Chartered Bank said the fundamental banking needs of customers have not changed over the years. “It is about how they want to manage, protect and grow their money,” he said. “What has changed is how these needs are being met in face of the changes in technology.”

Banks and fintechs should be complementary, working together to better serve the needs of customers, he said. He emphasized the importance of trust, “where customers deal with their hard-earned life savings.” In this regard, he said the regulators play a very important role.

Eric Jing of Ant Financial talked about addressing the pain points of individuals and SMEs, such as getting financing without collateral and the lack of flexibility in that lending (e.g. fixed term loans).

Mr. Jing referred to Ant Financial’s 3-1-0 approach to loans: three minutes to submit the application, one second to access the credit and send funds, and zero human involvement. With the traditional banks, the experience he had heard was one of “three weeks to do the application, one month to get a response, and zero chance of getting a loan!”

He gave a wealth management example. Previous there was a RMB 10,000 threshold as an entry point to invest with very complicated terms. With technology its possible to reduce that threshold to RMB 10, which is what Yuebao has done and now has more than 300 million people investing in its market money fund.

Commenting on trust, Mr. Jing said that blockchain technology is revolutionary in the way it provides trust. Blockchain shouldn’t be ignored or associated solely with cryptocurrencies, he said.

“We are living through an extinction phase,” said Stephen Bird of Citi. “It’s an epochal shift, more dramatic than electricity or the automobile.” He added that Citi’s 200-year existence demonstrated it has survival and reinvention in its DNA.

AMTD announces China Regional Bank Strategic Alliance

Calvin Choi

Calvin Choi

Meanwhile, over on the AMTD stage, Calvin Choi, Chairman and President of AMTD Group, announced the establishment of a Regional Bank “Plus” Strategic Alliance with Zhongyuan Bank, Guangzhou Rural Commercial Bank, Bank of Qingdao and Jiangxi Bank. The Alliance will be headquartered in Hong Kong.

The Alliance is a financial collaboration platform initiated and sponsored by the AMTD Group and the four founding banks mentioned above. The mission of the Alliance is to promote financial innovation, inclusive finance, green finance, and international expansion in compliance with relevant rules, regulations and policies.

Mr. Choi said a growing number of Chinese regional banks are listing in Hong Kong. Against a backdrop of the “Belt and Road” and the “Greater Bay Area” initiatives,s the interconnection between these banks and the Hong Kong capital market ever more important. Offering a more effective platform to connect China’s leading regional banks’ resources with Hong Kong and international markets, the Alliance serves as a super-connector.

Xiaomi on why financial services

Hong Feng

Hong Feng

Back on the main stage, Xiaomi Co-Founder Hong Feng reminded the audience how Xiaomi was the fastest company to reach US$10 billion in revenue and the first dual-share listing in Hong Kong. The company is now moving into financial services.

That may seem strange, he said, but Xiaomi has more than 100 other smart devices under its brand. This is thanks to its incubators. He said Xiaomi’s strategy is to take a minority stake in these companies. Their success is testament to the ecosystem Xiaomi has created.

This ecosystem and its deep knowledge of its user-base – in China, it has more than than 300 million mobile users – enables Xiaomi to enter financial services.

“We’re able to leverage hardware with software: mobile to payment card or entry card; wearables to payments and entry for transportation services,” he said, referring to how its products can be applied to financial services, so they understand both sides of the business.

“We see that manufacturers historically struggle to get good financial services, because financial institutions sometimes don’t know what to evaluate,” said Hong Feng. “Xiaomi understands its partners, the manufacturing process, quality control etc. It examines data from end to end, looking at sourcing variables – good tech, good team, activation rates, reputation…”

Banks just look at the balance sheet which is simply the end-result, he said. “Xiaomi looks at the lifestyle which leads to the end balance sheet. We know their quality control, the production rate etc. in real-time… There’s so much data that can be gathered at low cost. It’s the source variables that determine likely success for a company.”

Tencent sees huge growth potential in Greater Bay Area

Jim Lai, Vice President at Tencent, said there’s a lot of room for growth with the Greater Bay Area initiative.  “With the right approach, and enough support from regulators from both sides, I believe we can bring 10 times’ growth for a lot of the financial institutions including banks, insurance companies, and wealth managers in the next five years,” he said.

Fintech applications will speed up and widen the penetration of business, he said, pointing to remote account opening via facial recognition technology as examples. Apart from payment solutions, Mr Lai also saw wealth management products, securities trading tools as areas of great opportunities for fintech innovation.

Making money in Russia

Moscow-based Tinkoff Bank is the biggest digital bank in the world and it’s very profitable, said its founder Oleg Tinkov. He said it has 7 million customers, employs 12,000 people with 70% of them in IT. He added that the average age of his staff is 24-years-old.

“If you want to make money, you have to go to Russia,” said Tinkov, adding that Moscow is the best place for digital talent after Silicon Valley. He said the bank does retail and SME business, and is moving into lifestyle banking, adding 500,000 new accounts a month.  “We are successful because we are focused on Russia,” he said. “We know our customers, we know what they want. We focus on them.”

Hong Kong the place to tap Greater Bay Area and Belt and Road

Over on the Hong Kong stage, the audience listened as Charles D’Haussy, Head of Fintech at InvestHK, talked about the opportunities presented by the Greater Bay Area and Belt and Road Initiatives.

“It is going to be the biggest deployment of financial technology in human history,” he said, referring to the “Belt and Road Initiative” which covers 62% of the world’s population. “The populations in the Belt and Road are mostly served with primary infrastructure in financial services. We are talking about business opportunities for the next 25 years.”

The B2B fintech offerings in Hong Kong will complement the fintech scene in the Mainland which focuses on B2C, he said. As of now, there are 550 fintech companies in Hong Kong with a good mixture of B2B fintech offerings, with blockchain and cryptocurrencies, payments and remittances, and wealthtech being the top three areas of focus.

Starling Bank and Revolut

Megan Caywood, Co-founder and Chief Platform Officer of Starling Bank, a tech start-up with a banking license in the UK, talked about how open API platforms create a new type of marketplace for both banks and other types of companies to offer banking as a service.

Starling Bank, for example, had created a marketplace for customers to choose from a variety of services and products offered by partnering banks, financial institutions and fintech companies. With the authorization of their customers, data will be shared with the partnering banks and financial service providers to speed up the cycle of innovation in products and services, and matching customer needs with the right offerings.

She also pointed out the advantage of gaining a full banking license for fintech companies is that they will be in a stronger position to compete with traditional banks as the general public still have the habit to retain a banking account even as they utilise payment technology and other fintech applications. At the same time, digital only banks enjoy a much lower overhead cost but have a much nimbler business model.

Chad West, CMO of UK-based Revolut, explained how Revolut took a different approach to Starling Bank by opting to focus on growing its customer base. He said that Revolut aims to get a banking license shortly, and that it would be expanding into Asia and Australasia in coming months.

Mr. West said Revolut has achieved 3 million retail customers with “zero advertising.” He laid out the Revolut’s priorities: giving customers control over their money, so they know when and how it’s being spent with budgeting options in multiple currencies; offering value, such as interbank exchange rates, real-time transactions, while noting that “banks have stung consumers on fees for years.”

He highlighted other features offered by Revolut, such as on security, anti-fraud processes built around tracking behavioral patterns and transaction monitoring, along with full customer engagement, including letting them crowdfund and therefore have a stake in the company.

The panel session that followed, moderated by James Lloyd, APAC FinTech Leader at Ernst & Young, saw Ms. Caywood and Mr. West politely disagree on which route to take up the mountain: bank license first, with the constraints and benefits that go with it; or acquire customers first to get critical mass before applying for a license. The audience was entertained.

From bricks and mortar to virtual

After Starling Bank and Revolut, came Henry Ma, CIO of WeBank, and Michael Gorriz, Group CIO of Standard Chartered Bank.

Mr. Gorriz explained how Standard Chartered Bank, a traditional bricks and mortar bank, moved into virtual banking to reach customers in emerging economies, where the growth in customer numbers couldn’t be matched by a growth in physical presence. “This,” he said, “is the first segment of customers.” The second segment of customer are the millennials who want the services without the waiting, queuing and hassle of traditional banking.

He said Standard Chartered has a sizeable market share in Hong Kong, but it realised there’s a need for virtual banking here. to do it here. They studied the environment closely and crafted the bank from outside-in for the segment being targeted. For the architecture, he emphasised the need to start from a full fresh base. “Don’t put legacy systems behind it,” he said.  “New architecture can be linked to old through restful APIs.”

Mr. Gorriz said Standard Chartered tapped internal expertise and then hired from outside. The team has full autonomy, but can get help as needed. “Teams must be incentivised with the same KPIs so they can see the success of their work,” he said. “Hopefully the HKMA will grant a license.”

WeBank’s Henry Ma described how it can of offer services anytime anywhere in China, making it very different from the traditional incumbents. He said how market fundamentals and timing were important when WeBank launched. “China is hugely populated, with a fast-growing middle class, very connected with more than half the country using smartphone; and with an economy that’s more than 50% service focused.”

Mr. Ma explained how only 9% of people in China can go to financial institutions to get loans. Far more go to family or friends. WeBank banks it much easier with much lower entry points (RMB 500) for loans and for much more flexible periods. It now has 80 million customers.

Before the year-end, the HKMA is set to announce the first of the virtual banking licenses to be granted. As of the end of August, 29 banks and other companies had submitted applications to the HKMA. These include Standard Chartered Bank, Airwallex and WeLab.  Executives from each of them described their strategies and objectives, along with how they have gone about developing their infrastructure.

Insurtech hotting up

Speaking on the AMTD stage, Scott Walchek, Founder, CEO and Chairman of Trov, said insurtech made it possible for people to insure anything, anytime from anywhere. Trov offers on-demand insurtech for single items. He said insurtech enables “event-triggered ephemeral coverage” where further stratification of insurance coverage, including which object to insure and when could be further stratified.

Insurers, on the other hand, will also be able to individualize premium payments based on data, such as that of car insurance coverage based on mobility data collected from intelligent cars or other location tracking devices.

Alan Lau, Chairman and CEO of WeSure, said:

“Insurance is one of the most complicated financial products. Insurtech is offering new ways to reach users and give the market a new set of capabilities to design products, especially when the users of insurtech are mostly young working adults who have never used insurance products before.”

Wayne Xu, President of ZhongAn International, highlighted that generation, processing and protection of data as a key issue for insurtech.

“Insurers need to understand the source of data in terms of how it is generated before they can proceed to process the data from a user’s perspective, instead of a product-centric manner,” he said. “They will also have to make sure they have the trust of their customers, so that they will consent to providing access to their data to help insurers underwrite their policies.”

Raymond Tam, Executive Director, Insurance Authority, said:

“Among the different strands of fintech, the biggest change will be AI, because it AI not only changes the onboarding process and the financial needs analysis, but also changes the pricing, underwriting, and the back offer processing. AI is going to make a tremendous impact on a 300 years old industry.”

 

You can check Hong Kong Fintech Week 2018 Highlights here:

Day 1 Highlights

Day 2 Highlights

 

Featured image credit: Edited from Unsplash

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Gain an Insider’s Perspective on the Latest Big Data Technologies in Hong Kong http://fintechnews.hk/7472/bigdata/gain-an-insiders-perspective-on-the-latest-big-data-technologies-in-hong-kong/ http://fintechnews.hk/7472/bigdata/gain-an-insiders-perspective-on-the-latest-big-data-technologies-in-hong-kong/#respond Thu, 01 Nov 2018 04:13:59 +0000 http://fintechnews.hk/?p=7472 In an effort to inform, inspire and connect Big Data & Analytics practitioners across industries, Forward Leading is hosting the Big Data & Machine Learning Leaders Summit on December 6

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In an effort to inform, inspire and connect Big Data & Analytics practitioners across industries, Forward Leading is hosting the Big Data & Machine Learning Leaders Summit on December 6 & 7 at the InterContinental Grand Stanford Hong Kong.

This Summit has been successfully hosted in Sydney, Boston and Singapore throughout the past year and will be returning to Asia for the 3rd time. The 2018 Hong Kong edition will gather 120 innovative data leaders from the likes of Alibaba, AXA, LinkedIn, Standard Chartered Bank, American Express, Alliance Bernstein, L’Oréal, Genting.

Organisations from tech giant Alibaba to financial services company Standard Chartered Bank, are transforming their business by making better use of data science and analytics. To mark Fintech in this year’s summit, the organiser has teamed up with leading financial organisations including AXA, American Express, Alliance Bernstein and Anypay (a leading Japanese digital agency) to deliver an important session focusing on how big data technology has transformed the finance sector.

Big Data & Machine Learning Leaders Summit

Jayatu Sen Chaudhury, VP, Global Commercial and Merchant Data Science from American Express will showcase how Amex has adopted Big Data and its core processes in risk, fraud, marketing analytics and operations; Alliance Bernstein’s Chief Data Scientist – Jeffrey Yau will deliver a workshop on Time Series Forecasting Using Recurrent Neural Network and Vector Autoregressive Model: When and How; Ashok Krishnan, AXA’s Chief Data Officer & Head of Customer Experience will share his insights on The Guidance to Data Management and Governance Functions.

AnyPay is trying to develop a technology that allows Initial Coin Offering (ICO) projects to be structured and executed successfully. As the Chief Data Officer, Kamita Nakazawa will reveal the machine learning and blockchain technologies behind this.

To view the full agenda, please visit website here.

To watch a previous keynote at this summit, please click here.

To register a seat, please click here. (Get 20% off with Code “Fintech20”)

Big Data & Machine Learning Leaders Summit

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Ping An’s New Project With HKMA is a Blockchain-Powered Trade Finance Platform http://fintechnews.hk/7469/blockchain/ping-an-etradeconnect-hkma-trade-blockchain/ http://fintechnews.hk/7469/blockchain/ping-an-etradeconnect-hkma-trade-blockchain/#respond Thu, 01 Nov 2018 03:08:19 +0000 http://fintechnews.hk/?p=7469 Ping An Insurance delivered Hong Kong’s first blockchain-based international trade finance platform, eTradeConnect. The platform was initiated by seven founding banks in Hong Kong and facilitated by the Hong Kong

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Ping An Insurance delivered Hong Kong’s first blockchain-based international trade finance platform, eTradeConnect. The platform was initiated by seven founding banks in Hong Kong and facilitated by the Hong Kong Monetary Authority (HKMA).

Leveraging blockchain’s distributed ledger technology, financial institutions will potentially be able to access real-time, secure and comprehensive trade information to conduct their risk assessment on loans.

The hope is that similar processes will become more efficient, and potentially reduce financial costs for companies by digitalising trade documents in trade loan applications.

The Hong Kong Monetary Authority announced the official launch of eTradeConnect, initially connecting 12 joining banks with some of their trade finance pilot clients to share trade information with the use of blockchain technology.

OneConnect, a fintech subsidiary of Ping An, was appointed by the founding banks as the technology provider to help design, develop and deploy the platform. OneConnect is a SaaS platform providing advanced tech to SMEs based on technologies like artificial intelligence, blockchain, cloud platforms, and biometrics identification, and seem well-suited to the task.

Founding banks of the platform include The Australia and New Zealand Banking Group Limited (ANZ), Bank of China, The Bank of East Asia, DBS Bank, Hang Seng Bank, The Hongkong and Shanghai Banking Corporation and Standard Chartered Bank.

Currently, other member banks are Agricultural Bank of China, Bank of Communications, BNP Paribas, Industrial And Commercial Bank of China and Shanghai Commercial Bank.

Featured image via KPF architectural practice

 

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