Capturing the post-COVID FinTech tech surge

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While the COVID-19 pandemic inflicts a severe disruption to the global economy, it incentivises financial technology among businesses and consumers alike.
While the COVID-19 pandemic inflicts a severe disruption to the global economy, it incentivises financial technology among businesses and consumers alike.

While the COVID-19 pandemic inflicts a severe disruption to the global economy, it incentivises financial technology among businesses and consumers alike. Some of them may have been compelled to try, but now it becomes their habit. The change creates tremendous new opportunities.

All Markets Summit Asia-逆風前進

FinTech is already in daily life

You can no longer take away FinTech from daily life. Whether in fast-growing emerging markets such as China and India, or more mature markets like Australia and Japan, the penetration of online shopping and electronic payment tools keeps rising. In particular, non-cash transactions have become the norm in mainland China, Asia's largest economy. Tencent's WeChat Pay and Alipay of Ant Group, an arm of Alibaba, are the prevalent products, according to the 2020 Mobile Payment User Survey conducted by the Payment and Clearing Association of China.

Amid the epidemic in 2020, many Mainland Chinese merchants take advantage of WeChat's mini programmes to rebuild direct connections with consumers.

Tencent's WeChat Pay and Alipay of Ant Group, an arm of Alibaba, are the prevalent mobile payment products.
Tencent's WeChat Pay and Alipay of Ant Group, an arm of Alibaba, are the prevalent mobile payment products.

Tencent and Alibaba provide credit scoring services created by analysing consumer consumption patterns and payment habits. Users with higher credit scores enjoy better discounts, exemption from deposits for certain services, and lower borrowing rates. Such are examples of FinTech.

FinTech is increasing as well in Japan and Australia, the mature markets in Asia. Certain companies made international headlines for being acquired by overseas enterprises. In September, international payment giant Paypal announced to buy the Japanese buy-now-pay-later "unicorn" (a non-listed startup valued above US$1 billion) Paidy for 300 billion yen (approximately 21.13 billion Hong Kong dollars) with closing expected in the fourth quarter. In August, Paidy's Australian counterpart, Afterpay, became the target of the American FinTech innovator Square. The US$29 billion deal should complete in the first quarter of 2022. As such, mergers and acquisitions in the Asian FinTech sector are very active in addition to vigorous organic growth. All such can attract overseas investment.

Hong Kong launches "FinTech 2025"

An international financial centre in Asia, Hong Kong is at the forefront of FinTech planning. With all eight virtual banks having their "doors" opened, the city has become one of the first in Asia to launch virtual banks. The Hong Kong Monetary Authority unveiled the "FinTech 2025" strategy in June and aimed to establish measures to strengthen banks' application of technologies such as InvesTech, WealthTech, InsurTech, GreenTech, artificial intelligence and blockchain.

The Hong Kong Monetary Authority unveiled the
The Hong Kong Monetary Authority unveiled the "FinTech 2025" strategy in June and aimed to establish measures to strengthen banks' application of technologies such as InvesTech, WealthTech, InsurTech, GreenTech, artificial intelligence and blockchain.

In addition, Hong Kong plans to develop a central bank digital currency to solve difficulties in cross-border payment and cooperates with the Bank of International Settlement to study the technical feasibility of CBDC at the retail level. The government is looking at issuing the Digital Hong Kong Dollar (e-HKD) in Hong Kong. Another critical development is the introduction of Commercial Data Interchange, which allows the banks to leverage cross-sector data more effectively to facilitate operations. In the future, small enterprises in need of a loan can choose to provide business data to banks as the basis of approval via the Interchange, even if they fail to provide collateral.

The rise and popularisation of FinTech create investment and business opportunities and provide more new types of jobs. Currently, there are more than 100,000 employees in the banking industry in Hong Kong, according to HKMA deputy chief executive Arthur Yuen. To cope with green finance, FinTech and business development in the Greater Bay Area, about 8,000 to 9,000 people will be transitioned into new positions in the next three to five years. With the launch of Cross-boundary Wealth Management Connect, demand for wealth management-related staff will also increase.

The pandemic is driving an expedited Asia's FinTech development, which brings more opportunities for industry participants and creates potential profit for investors. Millennials and those interested in a FinTech career, be sure you seize the next decade, which will be a rare golden age.

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