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Robos face headwinds in Hong Kong

Hong Kong-based 8 Securities is preparing to launch a new robo-advisory platform, but investor education efforts are sorely needed.

The Greater Bay Area

Separately, Helleu said that the firm does not have plans to launch Chloe to retail investors outside of Hong Kong.

However, it has its sights on the Greater Bay Area, which is expected to open up the market in the future.

“If the GBA integration happens, it multiplies our market size from seven million to 70 million,” he said.

In February, Chinese authorities issued the outline development plan for the Guangdong-Hong Kong-Macao Greater Bay Area, which aims to promote cooperation between the nine cities in Guangdong Province and Hong Kong and Macau.

Part of the plan is to widen the scope of cross-boundary investment in the GBA and steadily expand the channels for mainland and Hong Kong residents to invest in financial products in each other’s market.

The launch of virtual banking licences in Hong Kong also creates opportunities for robo-advisors, according to Helleu.

“A lot of the Chinese conglomerates [applying for a virtual banking licence] don’t necessarily have brokerage or digital wealth experience. So that creates a lot of opportunities [for partnerships],” he said.

In March, the Hong Kong Monetary Authority granted the first virtual banking licences to three entities, which are Livi VB, SC Digital Solutions and Zhong An Virtual Finance, according to a statement from the regulator. In April, the fourth licence was given to fintech firm We Lab.

Zhong An Virtual is the subsidiary of Zhong An in China. SC Digital is the joint venture of Standard Chartered with PCCW, HKT and Ctrip Hong Kong. Livi VB is the joint venture between Bank of China (Hong Kong), JD Digits and Jardines.

Part of the Mark Allen Group.