Hong Kong FinTech Week 2024: A Hub for Innovation and Investment in Fintech

Speech by FS at Hong Kong FinTech Week 2024 (with photos/video)

Following is the speech by the Financial Secretary, Mr Paul Chan, at Hong Kong FinTech Week 2024 today (October 28):

Mr Xu Weigang (the Director-General of the Economic Affairs Department of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region), Mr Fu Xiaochu (the Director-General of the Guangzhou Municipal Local Finance Administration Bureau), Chris (the Secretary for Financial Services and the Treasury, Mr Christopher Hui), Salina (the Permanent Secretary for Financial Services and the Treasury (Financial Services), Ms Salina Yan), distinguished guests, ladies and gentlemen,

​Good morning everyone. Welcome to Hong Kong FinTech Week 2024, and a very special welcome to the innovators, founders, investors, and delegations from over 100 countries and regions.

The Hong Kong fintech sector

Hong Kong is emerging fast as one of the most attractive global fintech hubs. In the first half of this year, among the top 10 fintech deals in the Asia-Pacific region, three were in the Mainland and two in Hong Kong. That means, ladies and gentlemen, you are in the right spot to search for the fintech opportunities that lie ahead.

Our latest figures tell of the vibrancy of our ecosystem. At present, we house more than 1 100 fintech and Web3 companies, an increase of about 15 per cent in comparison with the figure last year.

Many of these companies are coming from outside Hong Kong. This year, the 60 companies that Invest Hong Kong has assisted are bringing in investments exceeding US$2.4 billion.

Indeed, during my recent visits to Australia, Europe and the United States (US), many fintech and other start-ups had shown great interest in establishing a presence in the city. Hong Kong’s open, free and diverse environment, burgeoning innovation and technology ecosystem, full range of funding support, deep talent pool, pro-business and pro-innovation regulatory system, the Greater Bay Area and Greater China application scenarios, and the ability to connect both China and the world are clear points of attraction.

Not only are we attracting US, European and Mainland fintech firms. We are reaching out to the Middle East too. This afternoon, I will be leading a delegation of more than 100 members from Hong Kong financial and innovation circles to Saudi Arabia. One of our local start-ups will be signing a deal with its Saudi counterpart there.

Big companies and big numbers aside, the core element of a vibrant fintech ecosystem is the entrepreneurship of fintech start-ups. In other words, the drive for excellence, the will to make financial services more competitive, inclusive and accessible, and ultimately, to make our lives better.

Hong Kong has no lack of fintech start-ups with such vision and spirit. I’m sure you will be able to meet many of them in FinTech Week. At this same event last year, I talked about a fintech company nurtured in Science Park using AI (artificial intelligence) and big data to power a credit-risk model, and helping SMEs (small and medium-sized enterprises) to obtain loans without necessarily providing collateral. That company, I’m pleased to note, had obtained facilities from global banks worth some US$750 million in just one year’s time. With such financial backing, this start-up has truly made impactful contributions to SMEs and the real economy.

Looking ahead: blockchain and AI

Looking to the future, two areas are definitely dominating the scene of fintech: blockchain and AI.

For both, the Government holds the same principle: we embrace new technologies as they unlock new innovations in the financial world. Yet we are mindful of the possible risks they may create to consumers, investors and the financial system at large. That’s why balanced, proportionate regulation is necessary, which is good for their sustainable and healthy development in the long term.

Digital assets

Take digital assets for example. That’s why we have put in place a licensing regime last year for digital asset trading platforms, based on the “same activity, same risk, same regulation” principle. Among the licensing conditions are segregating clients’ money; conducting due diligence on virtual asset (VA) products and taking on anti-money laundering obligations.

We have issued three licenses so far. Meanwhile, the SFC (Securities and Futures Commission) is assessing the legal and regulatory compliance of those deemed service providers. We expect more licences will be issued in the next couple of months.

As to stablecoins, the HKMA has already launched a stablecoin issuer sandbox in March to allow interested parties to conduct testing and to facilitate two-way communication on the proposed regulatory requirements, ensuring that such requirements are fit for purpose. It is our plan to introduce the legislation this year.

We are also reviewing the design of the regulatory framework for over-the-counter trading activities of digital assets. A second round of consultation will be conducted next year before introducing the licensing regime for VA custodian service providers.

AI

The transformative power of AI across different industries and sectors needs no explanation. In the financial market, AI is driving innovation in risk management, enhancing customer services, streamlining operations, preventing financial crime and much more. This combination of AI and finance is also setting new standards for excellence and innovation.

Like any other emerging technologies, we must not just eye the reaping of AI benefits but should also seek to address the potential challenges, such as cybersecurity, data privacy, the protection of intellectual property rights, and concerns about its impact on jobs and ethics.

This is the reason why this morning, the Government is rolling out a policy statement to set out our policy stance and regulatory approach towards the responsible application of AI in financial services. We consider it appropriate to adopt a dual-track model for AI. We will continue to encourage the adoption of AI to capture the opportunities, while assess its associated risks from time to time, and mitigate them. In this connection, the Government and financial regulators will work closely with the industry to provide a clear supervisory framework and create a conducive and sustainable market environment.

My colleague Chris, Secretary for Financial Services and the Treasury, will be giving you a thorough presentation on this AI policy statement.

Concluding remarks

Ladies and gentleman, all I have outlined are just a glimpse of the many facets of Hong Kong’s fintech scene. The rest is for you to explore. I trust the fruitful series of discussion are going to help us envision the future of financial services and inspire us with new possibilities.

I wish you all the best of business, and health, in the coming years. Thank you, and welcome again to Hong Kong Fintech Week 2024!

Speech by FS at Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

Speech by FS at Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

Speech by FS at Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

Speech by FS at Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

Speech by FS at Hong Kong FinTech Week 2024 Source: HKSAR Government Press Releases

HKSAR Government strongly condemns external forces for slandering and smearing court's sentencing in Lai Chee-ying case

Regarding the court's sentencing yesterday (February 9) for Lai Chee-ying and the other eight defendants, as well as three companies relating to Apple Daily in respect of their convictions of a total of three charges of offences endangering national security, the western countries, anti-China media, organisations and politicians have used this as a pretext to slander, smear, and attack the Hong Kong Special Administrative Region (HKSAR). They have even maliciously disparaged the court's independent judgement and sentence handed down in accordance with the law. The HKSAR Government firmly opposed and strongly condemned such despicable conduct.

A spokesman for the HKSAR Government said, "'Lai Chee-ying case' was the first convicted case of the offence of 'collusion with a foreign country or with external elements to endanger national security' since the promulgation and implementation of the Hong Kong National Security Law (HKNSL). This marks an important milestone in the HKSAR's efforts to safeguard national security, manifesting the role of the HKNSL as a key stabilising force. This case also admonishes that villains who endanger national security could never escape the sanctions of the law and would surely be severely punished in accordance with the law. Under the robust protection of the HKNSL, the attempts by external forces to 'use Hong Kong to contain China' are doomed to fail, leaving them with no option but only to smear and vilify the HKSAR's efforts to safeguard national security with futile and despicable political manoeuvres which would be in vain. By distorting facts and reversing right and wrong, their malicious intent has been seen through by all and must be resolutely refuted to set the record straight."

The HKSAR spokesperson stressed, "In Lai Chee-ying's case, after 156 days of fair and impartial public hearings, the court has considered the irrefutable evidence of up to 2 220 exhibits, over 80 000 pages of documents and statements of evidence from 14 prosecution witnesses. The court pointed out clearly that Lai Chee-ying was the mastermind of the case. He had manipulated and exploited Apple Daily to poison the society, and repeatedly colluded with external forces to beg for sanctions and hostile activities against the Central Authorities and the HKSAR Government. Even after the enactment of the HKNSL, all the defendants continued with their agreement for some time until after they were arrested by the Police. The court clearly pointed out that Lai Chee-ying's only intent was to seek the downfall of the Communist Party of China even though the ultimate cost was the sacrifice of the interests of the people of China and the HKSAR. Lai Chee-ying has brought harm to our country and Hong Kong; his evil deeds were beyond measure, and he for sure deserves his punishment after all the harm he has done."

The spokesperson reiterated, "The court clearly pointed out in the reasons for verdict that Lai Chee-ying was not on trial for his political views or beliefs. The court's publicly released reasons for verdict and sentence have meticulously explain the court's analysis of the relevant legal principles and evidence, as well as the reasons of the conviction and sentencing of Lai Chee-ying and the three defendant companies, which are well-founded and reasoned, with absolutely no basis for claims of so-called 'political prosecution'."

In response to views suggesting that the severe sentencing of the defendants in the Lai Chee-ying case would affect the HKSAR's freedom of the press, a spokesperson for the HKSAR Government emphasised, "The Lai Chee-ying case has nothing to do with freedom of the press at all. Over the years, the defendants were using journalism as a guise to commit acts that brought harm to our country and Hong Kong."

"Hong Kong is a society underpinned by the rule of law. The HKNSL and the Safeguarding National Security Ordinance clearly stipulate that the principle of the rule of law shall be adhered to in preventing, suppressing and imposing punishment for offences endangering national security. Any suggestion that certain individuals or organisations should be immune from legal consequences for their illegal acts is no different from advocating a special privilege to break the law, and this totally runs contrary to the spirit of the rule of law."

In response to views that the prosecution and trial of the Lai Chee-ying case took too long, causing unfairness to the defendants, the spokesperson pointed out, "All cases concerning offence endangering national security are handled by the prosecution and judicial authorities of the HKSAR in a fair and timely manner in strict compliance with Article 42(1) of the HKNSL, with the procedural rights of defendants exercised in accordance with the law fully respected throughout the process. Regarding Lai Chee-ying's case, the three counts of conspiracies were meticulously planned, the case was complex and involved a huge volume of evidence. Prosecution witnesses gave an elaborated account of the three counts of conspiracies in court. Lai Chee-ying himself even testified in court for 52 days. The time taken from investigation to trial was entirely reasonable, and there was absolutely no question of any so-called unfairness."

"Besides, the HKSAR Government noticed that certain individuals with ulterior motives have been fabricating lies about Lai Chee-ying's health conditions and his custodial arrangements. Facts speak louder than eloquence. The Correctional Services Department (CSD) has been ensuring that the custodial environment for persons-in-custody (PICs) is safe, humane, appropriate and healthy in accordance with the law. These include adequate lighting and good ventilation, as well as appropriate and timely medical support. The HKSAR Government has also pointed out time and again that the arrangement of removing Lai Chee-ying from association with other PICs, it has long been made based on his own request by the CSD after considering all relevant factors in accordance with the law. Lai Chee-ying's entitlements in prison, including visitation, communication, welfare and religious services, as well as outdoor exercise arrangements, have not been deprived of on account of his personal status or his removal from association with other PICs."

"During the plea in mitigation in court on January 12 and 13 this year, the senior counsel representing Lai Chee-ying confirmed repeatedly that Lai Chee-ying had made no complaints about the treatment he received while in custody. The court also confirmed in its reasons for sentence that the CSD has been providing adequate medical attention for Lai Chee-ying."

The spokesman reiterated, "The HKSAR Government will continue to uphold its constitutional duty and steadfastly safeguard national sovereignty, security and development interests. It will, as always, resolutely and strictly adhere to the principle of the rule of law to ensure that 'laws are observed and strictly enforced to bring offenders to account', so as to prevent, suppress and impose punishment for acts and activities endangering national security while protecting the lawful rights and interests of Hong Kong residents and other people in Hong Kong. The HKSAR Government urges all sides to recognise the objective facts and stop any baseless malicious attacks."

Source: AI-found images