HKMA Requires Banks to Submit Plans for Fintech Adoption
HKMA is requesting banks to participate in a tech baseline assessment, which forms part of the HKMA Fintech 2025 strategy. The assessment takes stock of banks’ current and planned adoption of fintech to enable HKMA to identify the fintech business areas or specific technology types that may potentially be underdeveloped and would benefit from the HKMA support. As part of the assessment, all licensed banks with significant operations in Hong Kong will be required to prepare and submit a three-year plan for fintech adoption to HKMA. HKMA also plans to circulate a questionnaire on fintech adoption in the near future. The questionnaire will highlight the factors that the covered banks should consider during the development of the three-year plan. Both the three-year plan and the completed questionnaire should be submitted to HKMA by December 31, 2021.
HKMA announced the new Fintech 2025 strategy on June 08, 2021 to give further impetus to fintech development in Hong Kong. One of the five key focus areas under “Fintech 2025” is the “All banks go fintech” initiative. This initiative aims to promote the adoption of fintech by Hong Kong banks and to encourage them to fully digitalize their operations from front-end to back-end. The tech baseline assessment is being introduced to take forward work in this regard. The three-year plan should include:
- A review of an institution’s current adoption of fintech and clear indications of how, and the degree to which, fintech will be incorporated in different aspects of the institution’s front to back-end operations by 2025. Details on the fintech business areas or specific technology types that the institution has already adopted or plans to adopt should be covered.
- Concrete action plans on how the institution intends to reach the desired level of fintech adoption, covering relevant factors of consideration such as budget and resource allocation, talent development, and leadership/governance arrangements.
- The institution’s assessment of how fintech adoption will impact its longer-term business strategy and competitiveness, including scope of business services and products offered as well as the ensuing benefits to customers.
For locally incorporated banks, the three-year plan should be endorsed by the board of directors. For foreign bank branches, the three-year plan should be developed under the scrutiny of their head office or regional headquarters.
Keywords: Asia Pacific, Hong Kong, Banking, Fintech, Fintech Strategy, Tech Baseline Assessment, Adoption Plans, HKMA
Previous Article
EC Prolongs Italian Guarantee Scheme for Non-Performing LoansRelated Articles
EC to Defer Application of SFDR Standards Till July 2022
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
EBA Seeks Views on Proportionality Assessment Methodology
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
US Agencies Propose Changes to Call Reports and Instructions
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
EBA Examines Asset Encumbrance in Banking Sector
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
EBA Publishes Methodological Guide to Mystery Shopping
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
APRA Issues Update on Capital Reform Policy Settings for Banks
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
CPMI-IOSCO Assess Continuity Planning of Market Infrastructures
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
ESMA Responds to Proposal Related to Sustainability Standards Board
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.
