May 28, 2019
If you have been tracking the latest developments in Hong Kong’s FinTech landscape, you may have noticed a recent report about the Hong Kong Monetary Authority (HKMA) issuing the first set of virtual banking licenses in the country. What stands out here is the speed at which Hong Kong’s FinTech policies are actively being put into action. It is evident that the country has come a long way since it first started adopting FinTech, perhaps a little reluctantly at first, but it soon grew in pace.
It comes as little surprise that the pace of change in financial services and insurance in Hong Kong has been accelerating in recent years. As one of the world’s freest economies, Hong Kong has been recognized as a favorable destination for international banks and insurers to set up headquarters. What’s also contributed to this is the country’s highly globalized and modernized industry outlook. Due to its laissez-faire economy, the city has drawn favorable comparisons to prominent financial hubs, such as London and New York.
Consider this: as of December 31, 2018, there were 161 authorized insurers in Hong Kong, of which 93 were pure general insurers, 49 were pure long-term insurers, and the remaining 19 were composite insurers. Hong Kong is one of the key insurance hubs in the world. Here is the general mix of insurers: 90 of them have been incorporated in Hong Kong while 71 insurers are incorporated elsewhere.
From a strategic viewpoint for many FinTech companies, having a presence in Hong Kong is essential to expand into the emerging APAC market. Hong Kong is endowed with world-class physical infrastructure, a healthy level of openness & innovation, a dedicated FinTech-friendly government, and proximity with mainland China.
Hong Kong has a vibrant entrepreneurial foundation, which is evident from the fact that it has over 3000 startups according to WHub, and is one of the fastest-growing startup ecosystems. The startup population is estimated to be 550+ FinTech companies & startups and 30+ InsurTech startups.
The Insurance Authority (IA), the foremost insurance regulator in Hong Kong, launched an InsurTech Sandbox in September 2017. The sandbox provides a platform for authorized insurers to run pilot trials of innovative Ins ...