Abstract

The project aimed to build the intellectual foundation of a grand strategy on fintech for Hong Kong. In light of the impact of fintech on individual investors, financial institutions, regulators, and the finance industry as a whole, the project addressed the fundamental issues that sit at the intersection between technology and financial services, such as digital payment, financial product design and distribution, public disclosures and distributed ledger applications. A range of topics were addressed, including blockchain, cybersecurity, personalized risk assessment, robo-advising, applications of AI/machine learning in multimodal analysis of financial disclosures, modelling systemic risk using advanced quantitative techniques, analyzing fintech services to address policy questions, and fintech manpower development. The project generated significant research findings, as well as practical applications and policy recommendations that are instrumental in enhancing fintech development for Hong Kong, particularly in terms of regulatory environment, innovation pipeline, cooperation between incumbents and startups, and the recruitment and nurturing of fintech talent.

Research Impact

Our research has significantly enhanced Hong Kong’s fintech capabilities on multiple fronts:

• Industrial Impacts:
  We developed a number of practical applications using emerging technologies, such as FinBERT and FinSent, which have been widely recognised. We also collaborated with the Joint Financial Intelligence Unit (JFIU) of the HK Police Force to streamline the processing of Suspicious Transaction Report using AI/ML, providing guidelines for implementing a large-scale anti-money laundering (AML) digital infrastructure.
• Policy:
  Drawing upon our in-depth study of seven fintech hubs, we offered a long-term roadmap with policy recommendations for Hong Kong in a report published in March 2022. According to the government’s fintech strategy, multiple large-scale surveys on virtual banks, e-HKD, and virtual assets were conducted to provide relevant insights to the industry and policymakers.
• Talent Development:
  We produced a range of reports that provide strategies to address talent shortages in fintech. We developed initiatives like the ECF-Fintech (Professional Level) Program and the Cyberport Financial Practitioners FinTech Training Programme to enhance fintech education for industry professionals. A dedicated jobs and skills portal was built to bridge industry skill gaps.
• Knowledge Exchange and Collaboration:
  The project established a platform to foster collaborations among fintech companies, startups, financial institutions, and regulators. Joint research initiatives, such as a partnership with HSBC on e-HKD readiness, and a “Hypothetical e-HKD” pilot run at HKUST, were developed to promote the wider adoption of fintech.