Hong Kong has established itself as a thriving fintech hub, boasting a mature and expanding sector.

A new report produced by Invest Hong Kong (InvestHK), in partnership with HKUST Business School, the Fintech Association of Hong Kong (FTAHK), and the Financial Services Development Council (FSDC), provides a comprehensive overview of this landscape, sharing insights form a survey of 130 fintech companies operating in the city, and exploring the growth of the sector these past couple of years.

Findings from the study indicate that Hong Kong has emerged as an attractive destination for fintech entrepreneurs. Half (50.1%) of the surveyed firms have set up their international headquarters in the city, while 30.1% have designated Hong Kong as their Asian headquarters.

This demonstrates the city’s appeal for business incorporation, particularly due to its attractive tax regime, large client pool, and generous government subsidies and funding schemes, which were all cited as key advantages of operating in Hong Kong.

Hong Kong has also positioned itself as a gateway for fintech companies looking to expand across Asia. Among businesses registered in Hong Kong (83.1% of the total), most operate in mainland China (37%), Singapore (37%), and Malaysia (20.4%), reinforcing the city’s status as a regional fintech hub.

But Hong Kong’s appeal extends beyond local firms, drawing international fintech companies as well. Of the surveyed firms not registered in Hong Kong (16.9% of the total), 50% operate there, on par with the US, followed by Singapore (45.5%) and the UK (36.4%). This suggests that the Hong Kong is a highly attractive market to them.

High fintech adoption, especially among businesses

Hong Kong boasts a high level of fintech adoption rates among both consumers and businesses. According to the 2023 PolyU-Asklora Fintech Adoption Index (FAI), 94% of consumers in the city use at least one type of fintech products, while 74% indicated using at least two. Across the five key fintech product categories studied, digital payments recorded the highest adoption, with a 91% rate.

Beyond consumer fintech, Hong Kong’s business-to-business (B2B) fintech sector is also thriving. A 2024 survey conducted by fintech startup Airwallex found that three in four import and export traders operating out of Hong Kong already use fintech for payments. An overwhelming majority (90%) said they were open to incorporating more fintech solutions for foreign exchange (FX) and international transfer services.

Additionally, a 2023 study found that 38% of financial institutions in Hong Kong have adopted generative artificial intelligence (genAI), exceeding the global average of 26%. This reflects Hong Kong’s financial services industry’s robust commitment to integrating cutting-edge technologies, including AI, into operations.

This trend is further evidenced by the InvestHK study, which reveals the prominence of B2B fintech in Hong Kong. Of the 130 fintech companies polled, 78.5% identified financial institutions as their target customer segment, with the top three sub-segments being banks (72.6%), asset managers (53.9%), and family offices (52.9%). Other top target customer segments include non-financial corporates (48.5%) and small and medium-sized enterprises (SMEs) (42.3%).

Hong Kong’s fintech sector

Currently, over 1,100 fintech companies operate in Hong Kong, including fintech unicorns HashKey Group, WeLab and Micro Connect:

• HashKey Group is a leading Web3 infrastructure developer and virtual asset group in Asia, providing an ecosystem of products and services including a regulated exchange, custody solution, brokerage, venture capital (VC), asset management and node validation services. It’s valued at US$1.3 billion, according to CB Insights;
• WeLab offers a range of services, such as online consumer credit platforms and virtual banking, serving markets including Hong Kong, mainland China and Indonesia. It reached unicorn status in 2017 after a US$220 million funding round; and
• Micro Connect is an exchange group that leverages technology to connect global capital with micro and small businesses. It’s valued at US$1.7 billion.

Wealthtech is currently the biggest fintech vertical in Hong Kong, with 198 companies. It’s followed closely by blockchain application and software, and digital assets and cryptocurrencies, with 175 and 111 companies, respectively.

Blockchain and digital assets lead growth

Blockchain and digital assets are also the two fastest-growing verticals in Hong Kong’s fintech sector. Between 2022 and 2024, the blockchain application and software sub-sector grew by a staggering 250%, while the digital asset and cryptocurrency sub-sector increased by nearly 30%.

According to the report, these trends reflect the success of Hong Kong’s progressive policies embracing digital assets and Web3. Key initiatives include:

• The October 2022 policy statement, where the Hong Kong government shared its intent to develop the city as a hub for virtual assets. This statement included a clear regulatory framework for crypto exchanges and stablecoins, pilot projects on tokenized green bonds, central bank digital currency (CBDC) trials, and support for Web3 companies operating in Hong Kong;
• The amendment of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) in December 2022, which introduced a new licensing regime for Virtual Asset Service Providers (VASPs). Effective June 01, 2023, the regime requires crypto exchanges operating in Hong Kong to obtain a license from the Securities and Futures Commission (SFC) and comply with AML and investor protection rules;
• The February 2024 regulatory guidance issued by the Hong Kong Monetary Authority (HKMA), targeting banks providing digital asset custody services. These institutions are required to implement robust governance, risk management practices, and ensure the safeguarding and segregation of client digital assets; and
• The publication the Stablecoins Bill in the Gazette in December 2024, establishing a regulatory framework for issuers of fiat-referenced stablecoins (FRS) in Hong Kong. The bill grants the HKMA with necessary supervision, investigation and enforcement powers, and sets out licensing requirements covering financial resources, risk management, AML/CFT, information disclosure, and more.

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