Hong Kong Fintech Week 2024, co-organized by the Hong Kong Monetary Authority (HKMA) and Invest Hong Kong (InvestHK), wrapped up on November 01, drawing over 30,000 attendees from more than 100 economies.
Featuring hundreds of distinguished speakers and numerous exhibitors, the event showcased cutting-edge technologies such as artificial intelligence (AI) and blockchain, and discussed some of the biggest trends shaping the global fintech landscape.
This year’s event reinforced Hong Kong’s position as a global fintech hub, highlighting its business-friendly environment, robust regulatory framework, and strategic location. Key announcements underscored the city’s commitment to financial innovation, including regulations on digital assets and insurtech, infrastructure modernization efforts, as well as cross-border partnerships.
AI and tokenization took center stage, with experts discussing their transformative impacts across industries. Climate change and cyber resilience were also hot topics, reflecting Hong Kong’s proactive approach to emerging environmental and cyber threats.
Hong Kong’s booming fintech sector
The main conference kicked off on October 28 with opening remarks by Paul Chan, Financial Secretary of the Government of the Hong Kong SAR, highlighting Hong Kong’s emergence into a global fintech hub.
Chan emphasized the city’s liberal business environment, robust legal system, and low tax rates, which have propelled Hong Kong to the fourth position globally for foreign direct investment (FDI) and allowed it to become one of the world’s top tech hubs.
He noted that Hong Kong is now home to 1,100+ companies specializing in AI, Web3, blockchain and other innovation tech applications, an increase of about 15% from 2023.
Algernon Yau, Secretary for Commerce and Economic Development, expanded on these achievements on the second day of the conference, reporting that InvestHK, the government department responsible for attracting FDI, has assisted 470 enterprises so far in setting up Hong Kong offices since the start of 2024. 23% of these new companies specialize in fintech products, reflecting Hong Kong’s strength in the sector and highlighting the city’s strategic position as a “super connector” in the Asia-Pacific (APAC) region.
Clear regulations for digital asset innovation
Showcasing Hong Kong’s supportive stance on new technologies, Chan highlighted the city’s regulatory initiatives for digital asset activities. These include a licensing framework for trading platforms, a stablecoin issuer sandbox launched in March to test stablecoin-related activities, and regulations governing over-the-counter (OTC) trading of digital assets.
Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, also announced a new law to be enacted by the end of 2024 that will extend Hong Kong’s tax concessions to a wider range of assets, including virtual assets. He added that further regulation for stablecoins and a licensing regime will be introduced next year for providers of virtual assets custodian services.
Advancing tokenization
Eddie Yue, Chief Executive of the HKMA, introduced Project Ensemble, an initiative aimed at fostering tokenization in Hong Kong, and launched the Ensemble Sandbox to support experimentation with tokenization and central bank digital currency (CBDC).
Yue said that the HKMA has already completed the initial phase of six tokenization use cases under Project Ensemble and will publish a report detailing the results of the experimentation in 2025. Four new participants have recently been added to the sandbox, and will begin experimenting with use cases involving fixed income and investment funds.
Yue also announced new cross-border partnerships with the Central Bank of Brazil and the Bank of Thailand to explore cross-border tokenization use cases under Project Ensemble.
Building on the success of the two tokenized government green bond issuances under Project Evergreen, the HKMA is also taking the project to the next phase by introducing a series of measures to promote wider adoption of tokenization in capital markets.
One of these is the Digital Bond Grant Scheme, which will offer a maximum grant of HK$2.5 million for each eligible issuance, aiming to incentivize digital bond issuance in Hong Kong and cultivate the local digital asset ecosystem. The HKMA has consulted the industry and will announce detailed guidelines shortly.
Another initiative is the EvergreenHub, a knowledge repository launched by the HKMA for industry insights on digital bonds to guide issuers and investors through the tokenization process.
The AI imperative
Hui, the Secretary for Financial Services and the Treasury, outlined Hong Kong’s initiatives in advancing AI, particularly in finance, and introduced the city’s new policy stance aimed at fostering responsible AI use in the financial sector. He stressed the government’s commitment to supporting responsible AI integration, while addressing emerging risks including cybersecurity, data privacy, and intellectual property protection.
Hui highlighted Hong Kong’s advantageous position in AI innovation, given its connections with Mainland China which is home to over 60% of global AI patents, as well as its unique position as a bridge between the East and the West in AI innovation. He noted that AI adoption in Hong Kong’s financial sector has increased steadily, reaching a penetration rate of 38% and exceeding the global average of 26%.
Yue of the HKMA sees the “incredible opportunity” for AI adoption especially in Hong Kong, noting that in adopting AI, Hong Kong’s economic benefits could reach around HK$287 billion by 2030.
Day 2 of the main conference featured several panel discussions where experts discussed the AI ecosystem as well as China’s rapid advancements in the field, which has accelerated digital transformation across industries.
Zhang Xiaojun, Huawei Blockchain CSO and Huawei Cloud CTO, Huawei Cloud, predicted that AI will become mainstream in corporate digital transformation, stating that “more than half of companies will apply AI in corporate operations in the next two years.”
Esther Wong, Founder of 3Cap Investment, shared her views on AI as a venture capitalist (VC), noting that deep industry knowledge was needed to find the companies that are worth investing in. She also talked about the significant power demands of AI and how they would rapidly eclipse available power supply in the next era of AI without significant infrastructure development.
GenAI for efficiency gains
Hong Kong Fintech Week 2024 also spotlighted generative AI (genAI). Yang Hongxia, Professor at the Hong Kong Polytechnic University, shared insights on the current state of AI and upcoming opportunities in genAI.
She suggested that the most promising opportunities for genAI lie in devices and enterprise-based AI. GenAI for devices can enhance their capabilities for complex tasks like real-time translation, while enterprise-based genAI can streamline processes in decision-making, task automation, and improve customer interaction for businesses, she said.
In a separate panel discussion, Miles Wen, Co-Founder and CEO of Fano, noted that the last year has revealed many new use cases for the technology in banking. He deplored however that most are internal applications.
Wen noted that AI assistants are already helping banks to serve customers faster and better. AI tools are also proving critical for fighting financial crime, helping deal with large caseloads and identifying deepfakes that humans cannot.
Insurtech: adapting to emerging risks
On Day 2 of the main conference, Clement Cheung, CEO of the Insurance Authority, highlighted the long-term effects of unchecked climate and cyber risks.
Climate change has resulted in island nations having to focus on resiliency measures and worst case scenario planning, whereas cyber security threats have resulted in an uptick in cyber attacks globally, and in Hong Kong.
These risks affect not just businesses but communities as well, with changes caused by natural catastrophes for instance, giving rise to increased water borne disease and mental and psychosocial health issues, Cheung warned.
To address this evolving landscape, Cheung announced the Insurance Authority’s plans to launch a survey in 2025 to develop a regulatory framework for AI in insurance, focusing on perception, pragmatism, and progressiveness.
Leveraging data to facilitate trade
The HKMA also touched on the several projects it is spearheaded that are aimed at facilitating the use of data.
Commercial Data Interchange (CDI), for example, is a data infrastructure designed to facilitate small and medium-sized enterprise (SME) lending. The central bank is currently working on connecting CDI with the Land Registry to enhance mortgage and loan assessments for individuals and corporates, as well as with the Hong Kong International Airport Cargo Data Platform to incorporate cargo logistics data to streamline lending.
Finally, the HKMA is exploring pilots on cross-boundary credit referencing with Mainland China’s credit reference platforms to enhance cross-boundary banking service offerings to SMEs. It’s also participating in Project Aperta, a cross-jurisdictional collaboration on open finance application programming interfaces (API) network, to reduce frictions and costs in global finance. Initial use cases will focus on trade finance for SMEs.
Payment connectivity
The HKMA shared its ongoing efforts in payment modernization, stating that it is currently working with the People’s Bank of China to establish a cross-boundary linkage between Hong Kong’s Faster Payment System (FPS) and the Mainland’s Internet Banking Payment System (IBPS).
This linkage will support 24/7, instant, small-value, cross-boundary remittances using account proxies like mobile numbers, and a pilot launch is expected around mid-2025 tentatively.
Chan highlighted the significant growth in cross-boundary travel between Hong Kong and Mainland China, particularly with Shenzhen which recorded a remarkable 80%. He also noted a surge in cross-border digital payment usage in Mainland China, which increased by 70%.
Fintech Connect: a cross-sectoral sourcing platform
On October 28, the HKMA debuted Fintech Connect, Hong Kong’s first cross-sectoral sourcing platform.
This platform is designed to bridge financial institutions with fintech solution providers, fostering innovation and collaboration. This includes Qianhai-based fintech companies to strengthen partnerships in the Greater Bay Area (GBA).
2024 Global Fast Track Awards Winners
Finally, on October 29, the Global Fast Track Awards unveiled this year’s winners.
WeavInsight from Singapore was selected as the winner in the Global Fast Track International Category. WeavInsight is a provider of environmental, social and governance (ESG) data analytics software for financial institutions and fund managers. Its platform combines satellite imagery networks, predictive AI models, and decision support systems to deliver real-time, highly accurate data-backed ESG decision-making.
In the Global Fast Track Mainland China Category, Shanghai-based Datatist was named the 2024 winner. Datatist is an AI predictive analytics software solutions for banking and securities clients. Its AI platform consists of hundreds of models to ensure operational effectiveness, while maximizing return on investment and efficiency.
