HKMA Requires Banks to Submit Plans for Fintech Adoption

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