Hong Kong Official Highlights FinTech Game Changers

FinTech,
and in particular blockchain technology, is set to significantly change how
banks operate, according to John Tsang, financial secretary for the Government
of Hong Kong SAR.

However,
speaking at a Fintech briefing in New York today, he warned that some banks are
ill-prepared for the changes that will be driven by this new technology.

“Most of
the bankers that I know are the people that are least prepared to deal with
FinTech, they have no idea what blockchain is and blockchain is going to change
their lives. They might not have a job, to put it in a more brutal way,” he
said.

Despite
this, Tsang added that some individual banks are working with the Hong Kong
Science Park to develop new FinTech applications and commented that it is
important that staff are trained about these new technologies as “it’s
extremely important for people to be aware how some of the processes will
change in the future once a lot of the FinTech is put into place”.

When asked
about the governments’ view on bitcoin and other cryptocurrencies and Tsang
responded: “Currently bitcoin and other [cryptocurrencies] are not recognised
as currency in Hong Kong, but a lot of blockchain applications have been put in
place and there are possibilities that we can look at. At this stage it’s
difficult to say how that will progress, but certainly it would have to comply
with the overall legal framework that we have.”

He
emphasised that setting up a FinTech firm in Hong Kong does not currently require
any form of license and that the government is trying to build an ecosystem is
conducive to further growth of FinTechs.
 

Despite
this, Tsang warned that many FinTechs working with banks could run up against
US regulations under the Foreign Account Tax Compliance Act (FATCA).

“Any bank
that needs to settle in US dollars will have to comply with a lot of those
issues and that has become a huge concern and that is why we want to go into
the FinTech area and find ways that we can facilitate the process and help
reduce the compliance costs,” he said.

Colin Lambert

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