For nearly two years, Hong Kong and Singapore have signed a number of fintech agreements with other countries, including Australia, Malaysia, UK and Thailand.
To support fintech development, both markets also set up their own regulatory “sandboxes” and “innovation hubs”.
But because they are both rivals fighting for the edge in the emerging fintech industry, they never sought a partnership.
However, that position has just changed. Yesterday the HKMA and the Monetary Authority of Singapore announced their first collaborative initiative: A strategic project on trade finance cross-border infrastructure, based on distributed ledger technology, according to an HKMA statement.
“Hong Kong and Singapore are the two leading international financial centres in the region and are actively deploying fintech,” Norman Chan, HKMA’s CEO, said in the statement. “Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets,” he added.
“This is one of our more significant fintech cooperation agreements, given the extensive financial and trade linkages between Hong Kong and Singapore, Ravi Menon, MAS’ managing director, said in the MAS statement.
Taiwan signs on, finally
In a separate agreement, the Fintech Association of Hong Kong (FTAHK) signed memoranda of understanding with the Taiwan Fintech Industry Development Association (FIDA), the Singapore Fintech Association (SFA), the Swiss Finance and Technology Association (SFTA), according to a joint statement from the three associations.
FTAHK will work with its partners on initiatives to support fintech development, including participating in each others’ events and improving the fintech ecosystem across Asia and Europe.
From January 2016-February 2017, Asia-Pacific attracted the largest amount of fintech investment with a total of $14.8bn, according to a PWC report. However, China accounts for 88% of the world’s fintech investment and significant innovation is occurring through firms such as Alibaba and Tencent.
Hong Kong’s proximity to China makes it hard for other fintech hubs to compete against the city, according to a Deloitte report last year. Hong Kong provides a base for outbound mainland Chinese companies to scale in Asia and potentially expand into Europe through acquisitions.
In terms of investment capital, Hong Kong attracted nearly 5x more fintech investments ($165m) than Singapore ($35m) as of end-July last year, according to an Accenture study.
