LTP recently had the pleasure of interviewing Charles D'Haussy, Head of FinTech at Invest Hong Kong. Here are excerpts from that interview:
LTP: Tell us about yourself.
Charles d’Haussy: I have been Head of FinTech at InvestHK since September 2016. I’m French and I started my career in Hong Kong 13 years ago. Early in my career, I seized the vibrant opportunities available in Hong Kong and China by setting up my own company. I have also worked for a leading online broker and digital wealth platform aimed at Hong Kong and Japan.
I am enjoying the opportunity of heading the new dedicated FinTech team at InvestHK. My team is responsible for helping overseas and mainland FinTech companies to establish or expand their business presence in Hong Kong through our free, confidential and customized services. We are also responsible for promoting Hong Kong as a premier FinTech Hub which attracts the best and brightest.
LTP: How do Asian FinTech hubs compare to their European counterparts?
CH: FinTech is rapidly growing in Asia and nowhere more so than in mainland China. What really makes Hong Kong stand out is its location. Hong Kong is a fantastic launch-pad for China and other parts of the region – from here you have access to half the world’s population within a five-hour flight. Our access to mainland China offers us unrivaled opportunities. In January 2017 Hong Kong and Shenzhen signed a Memorandum of Understanding to jointly develop the Lok Ma Chau Loop at the border with mainland China. This project will blend the software, the talent, services and management of Hong Kong and the advanced hardware in Shenzhen. This 87-hectare site will be the largest innovation and technology platform in Hong Kong and create unprecedented space and opportunities for the development of innovation and technology.
Hong Kong has all the ingredients necessary to be the global and regional FinTech hub. We are an international financial center recognized for having the freest economy, the rule of law, a strong legacy of trade and a large talent pool with an impressive work ethic. Hong Kong is also a very nice and efficient place to live. The nature of the city makes networking and meeting people very easy. The Hong Kong Special Administrative Region (HKSAR) Government has pledged full support to the FinTech sector, and the industry was mentioned by the Chief Executive in his latest Policy Address. Working in partnership with the private sector, the FinTech ecosystem in Hong Kong is increasingly vibrant.
LTP: How does Hong Kong compare to European hubs in terms of scale?
CH: Hong Kong is consistently ranked as one of the strongest startup hubs in the world. The top 10 investments in Asia-Pacific FinTech ventures occurred in China and Hong Kong, accounting for 90% of overall Asia-Pacific investments and was valued at $8.75 billion; in the same time period, Europe attracted $1.85 billion.
Asia already has some of the world’s largest FinTech companies: Ant Financial is one standout example. Hong Kong is ready to work with the major European FinTech hubs such as London and Berlin because we have a strong tradition of working with the British and European partners. We also have a significant European community of around 60,000 people here.
LTP: What are the main challenges that European FinTech startups currently face?
CH: The challenges for European FinTech companies are similar to those faced in many other parts of the world: how to convert concepts into products that can go to market, and then scaling up. Location, language and culture inevitably play a part, as does the need to develop scale. But these have been issues for new businesses for centuries!
LTP: Are Hong Kong authorities supportive of FinTech?
CH: Yes. The Hong Kong Monetary Authority (HKMA) has announced several new initiatives to support FinTech development. HKMA and the Hong Kong Applied Science and Technology Research Institute (ASTRI) are setting up a FinTech Innovation Lab. This will be equipped with all necessary systems and support resources to allow those in the banking and payment industry to conduct proof-of-concept trials of products and services.
The launch of FinTech Supervisory Sandbox allows startups which partner with banks to conduct testing and trials of new technologies and applications. Within the sandbox, banks can test innovative FinTech products and initiatives without having to achieve full compliance with HKMA’s supervisory requirements.
Recently, HKMA and ASTRI launched the FinTech Career Accelerator Scheme (“FCAS”) to nurture the talent needed to meet the growing needs of FinTech in Hong Kong. FCAS is supported by 11 banks and nine universities and will provide internships for undergraduate and postgraduate students interested in a career in the FinTech industry.
In December 2016, HKMA and the UK Financial Conduct Authority (FCA) signed a Cooperation Agreement to foster collaboration between the two authorities to promote financial innovation. The HKMA and the FCA will closely collaborate on a number of initiatives such as referrals of FinTech firms, joint innovation projects, information exchange and experience sharing.
The HKSAR Government also injected HK$5 billion into the Innovation and Technology Fund (ITF) in 2016 which benefits FinTech and other startups. Other key initiatives include HK$2 billion to launch a Midstream Research Program for Universities to provide funding support for universities to carry out more midstream and applied research projects in key technology areas and continuing with the Technology Startup Support Scheme for Universities to assist technology startups established by university teams in commercializing research results.
The government has also set up a HK $2 billion Innovation and Technology Venture Fund to co-invest with private venture capital funds on a matching basis in local technology startups, and Cyberport will earmark HK$200 million to invest in its startups. Cyberport also launched the 35,000 square foot Smart-Space FinTech co-working space for financial technology startups and companies last year.
As you can see, a lot is going on and there will be more initiatives announced this year. The government is currently exploring the application of blockchain technology in financial services. HKMA released a blockchain white paper in November 2016 and there will be more research carried out this year.
LTP: Tell us more about InvestHK.
CH: The HKSAR Government established InvestHK in 2000 to attract foreign direct investment and support overseas and Mainland businesses that wanted to set up or expand in Hong Kong. InvestHK provides free advice, confidential and customized services to help businesses succeed in Hong Kong’s vibrant economy.
In addition to startups, InvestHK is also tasked by the Financial Services and Treasury Bureau to promote FinTech. In 2016, InvestHK set up a dedicated FinTech team to act as a one-stop platform to attract and assist overseas FinTech startups and companies. The team reaches out to FinTech communities through a diverse range of channels including traditional and social media, overseas promotion and sponsored events, all to promote Hong Kong as a leading FinTech hub in Asia.
In November 2016, the inaugural FinTech Week took place in Hong Kong, attracting more than 2,500 participants and an array of international FinTech companies and startups looking to grow their business, as well as accelerators, incubators and investors searching for opportunities and innovation.
LTP: What are InvestHK’s plans for 2017 and beyond?
CH: We obviously want to see growth in the FinTech sector and we are focusing on blockchain, cybersecurity, InsurTech, RegTech and WealthTech. We’re constantly looking to attract more overseas and Chinese FinTech companies and events to Hong Kong to see how they interact and exchange with the local community and grow the ecosystem here organically. Our next InvestHK FinTech Week is scheduled for November and it will again play a significant role in bringing the latest thinking and technology to Hong Kong.