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New alliance launched in Hong Kong to help support local FinTech startups

New alliance launched in Hong Kong to help support local FinTech startups

On January 24, a new alliance was launched
in Hong Kong to help support local start-ups in the financial technology (FinTech)
sector. The CSI Alliance has Cyberport, the Smart City Consortium (SCC) and IBM China/Hong Kong Ltd as its
core members. It aims to foster collaboration between technology, academic and
commercial stakeholders to address issues faced by FinTech start-ups and help
accelerate their growth.

Cyberport is a digital startup hub with 1000 digital tech
companies, including nearly 250 FinTech companies. It provides full-range
entrepreneurial support and value-added services for start-ups and is managed
by Hong Kong Cyberport Management Company Limited, which is wholly owned by the
Hong Kong SAR Government.

The SCC comprises a group of professionals from different
corporations and organisations which aims to provide opinions and suggestions
to the Government for formulating related policies and standards in the
development of Hong Kong as a world-class smart city.

Research by InvestHK, the
department of the Hong Kong SAR Government responsible for Foreign Direct
Investment, shows that Hong Kong's start-up ecosystem has been expanding
rapidly, with the number of companies increasing 24% and staff by 41%
year-on-year. However, the founders of the CSI Alliance feel more can be done to
support Hong Kong fledgling innovators, particularly in the financial sector.

Cyberport will leverage its strong network of financial
services partners to reinforce its strategic role to connect digital tech
start-ups with enterprises to accelerate adoption, said Dr. Lee George Lam, Chairman
of Cyberport.

Under IBM's Global Entrepreneur Program (GEP), start-ups can
receive credit of up to US$120,000 for instant access to cloud-based tools and
infrastructure needed to quickly launch their businesses and focus on coding,
building, scaling and bringing innovations to market. It also connects them
into IBM's enterprise client base, many of whom look to the start-up community for
new approaches to industry challenges.

Deep Invest Technology Limited and Wesurance are Cyberport
community companies and both IBM GEP recipients. Deep Invest's platform helps
finance professionals make smarter investment decision through deep
learning-based sentiment analyses and scoring of millions of stock articles.
Wesurance aims to deliver a hassle-free insurance purchase and claims
experience through its app, a first-of-its-kind mobile solution leveraging eKYC
(Know Your Customer) and AI (artificial intelligence).

Mr. Eric Yeung, President of the Smart City Consortium, said,
“Fostering Hong Kong innovation and sustainable economic require collaboration
and among different stakeholders to create the right ecosystem. One of the
critical functions of the CSI Alliance is therefore to facilitate the exchange
of ideas, including industry and solution expertise, advice and views to assist
start-ups their growth. That collaboration extends to government, which has a
key role to play in formulating related policies and standards."

SCC has developed an international business matching
platform under the theme of Smart City, called LinkedSmart , jointly
with Smart City Development Alliance
[SCDA] in mainland China,. Along with
the Alliance, it can provide further support to the start-ups when they are
ready to go for market or looking for investors. These relationships will be
harnessed within the new alliance.

FinTech and Hong Kong’s
Smart City Blueprint

FinTech was identified as one of the
key areas to generate momentum for Hong Kong’s economic development, under the
‘Smart Economy’ area in the city’s Smart City Blueprint released last December.

Speaking
at the launch, Ir. Allen Yeung, JP, Government Chief Information Officer (GCIO)
also pointed out FinTech initiatives will also have an impact in the ‘Smart Living’
area of the Blueprint, for instance through mobile payment solutions bringing
greater convenience to citizens.

In October 2017, the Hong Kong Monetary Authority (HKMA) announced
the launch of 7 initiatives to spur the development of smart banking. Since the
establishment of the Regulation
of Stored Value Facilities
(SVF), HKMA has already issued 13
licences.  Three licenced banks are also offering SVF products.  During
the past year, they started offering a number of mobile payment solutions to
the customers. 

To further facilitate P2P payments, HKMA will launch the
Faster Payment System (FPS) by September 2018, providing a round-the-clock
real-time payment platform.  It will allow banks and SVF service providers
to offer their customers and merchants a faster, more convenient and
comprehensive payment and transfer services.

At the moment, different SVF service providers have their
own QR code standards.  To facilitate further development of mobile
payment, HKMA is leading a working group to explore a common QR code
standard.  The new standard will enable merchants to use one single QR
code to accept payments from various service providers.

The GCIO also said that the eID
initiative is an important element to foster the development of FinTech in Hong
Kong. All Hong Kong residents will be provided with an eID by 2020. 
The eID can ensure secure access to online transactions and services,
including day-to-day and mobile financial transactions, provided by public and
private organisations, using a single digital identity and authentication.