Hong Kong Chooses 3 Startup as Part of the Global Fintech Sandbox Project

The Hong Kong Monetary Authority (HKMA), is one of 17 global regulators that are participating in the Global Financial Innovation Network (GFIN) cross-border pilot tests—which has just shortlisted 8 fintechs.

In total, 44 unique applications were submitted across the 17 participating regulators. The HKMA, like other regulators, are given the liberty to put these applicants through individual screening criteria, including consider whether they have the ability to support the activity.

After this initial screening, the HKMA will continue to work with the 3 fintechs out of the 8 that have passed. Now, the fintech firms will have to develop testing plans with their relevant regulators for their cross-border trials.

However, this pass doesn’t mean they have access to the sandbox quite yet. Only firms that manage to develop satisfactory testing plans with their relevant regulators will be given access to the coveted sandbox.

An announcement of fintechs that are formally selected for the pilot will be made in the later half of 2019.

The three fintechs that are working with the HKMA for GFIN are:

Ascent RegTech

Ascent operates a cloud-based AI-driven Regtech solution that automatically maps a customer’s specific regulatory obligations and ongoing rule changes, while also enabling end-to-end compliance management. The product helps firms see similarities and differences in regulatory obligations across regulators and countries.

Regulators affected:

• Australian Securities & Investments Commission (ASIC)
• Autorité des marchés financiers (AMF Québec)
• Dubai Financial Services Authority (DFSA)
• Financial Conduct Authority (FCA), Hong Kong Monetary Authority (HKMA)
• Ontario Securities Commission (OSC)

Onfido

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Onfido is a software company that helps businesses verify user identities using a selfie and a photo-based ID.

Its preposition in the GFIN sandbox is for consumers to securely control their digital ID, and share or transfer that identity across financial services organisations for KYC checks.

Regulators affected:

• Hong Kong Monetary Authority (HKMA)
• Financial Conduct Authority (FCA)
• Bank of Lithuania (LB)
• Ontario Securities Commission (OSC)

Starling Trust

Starling trust is an applied behavioural sciences technology company that has developed a predictive behaviourial analytics platform using machine learning and electronic communications data to allow users to measure, manage and mitigate culture and conduct risks. They will be partnering with a select group of global banks, with an initial focus on the three lines of defense risk framework.

Regulators affected:

• Australian Securities & Investments Commission (ASIC)
• Dubai Financial Services Authority (DFSA)
• Financial Conduct Authority (FCA)
• Hong Kong Monetary Authority (HKMA)

You can find out more about the other shortlisted fintechs for the global fintech sandbox, what they want to do and the regulators they’d like to work with here.

Of those applications that did not meet the eligibility criteria for testing, GFIN members will engage in further discussions on other types of potential support where relevant. Also, several applications have been determined by some regulators to not need sandbox in their jurisdictions to proceed to testing.