BrazilHong Kong and Abu Dhabi financial authorities sign deal on fintech innovation
The Hong Kong Monetary Authority has signed a strategic cooperation agreement with the Abu Dhabi’s Financial Services Regulatory Authority on mutual support for fintech innovation within their respective markets.
As the promise of the fintech sector’s monumental disruption to traditional banking systems edges closer to an everyday reality, and financial centres across the globe jockey for regional dominance, cross-border collaboration for international regulatory bodies and fintech hubs is becoming an increasingly regular affair. The latest of these announcements sees the Hong Kong Monetary Authority (HKMA) buddy up with the Abu Dhabi Global Market (ADGM).
The HKMA, Hong Kong’s defacto central bank, and the Financial Services Regulatory Authority (FSRA) of the ADGM – an international finance centre in Abu Dhabi - will seek to jointly promote financial innovation and business expansion opportunities between their home markets, while facilitating increased information sharing and the potential for joint projects. In addition, the regulatory bodies will explore the case for a blockchain-like financial trade network.N
elson Chow, HKMA’s Chief Fintech Officer, said of the agreement; “ADGM’s commitment to the pursuit of innovation resonates strongly with Hong Kong’s ambitions. The co-operation between the HKMA and the FSRA would strengthen the two authorities in their respective roles and initiatives in FinTech. We are particularly pleased to start a dialogue with FSRA on the opportunity to build a cross-border trade finance network using distributed ledger technology.”
The HKMA late last year signed a memorandum of understanding with the Monetary Authority of Singapore (MAS) to jointly develop such a network – the Global Trade Connectivity Network (GTCN) based on distributed ledger technology (DLT – which digitally records transactions in a decentralised fashion), while the Hong Kong authority already has an existing cooperation agreement with the Dubai Financial Services Authority (DFSA) previously put in place.
The FSRA meanwhile now has up to a dozen similar strategic fintech agreements with other leading authorities. “We are glad to further our partnership and collaboration with HKMA by way of this FinTech agreement,” FSRA Chief Executive Richard Teng said of the latest addition. “Hong Kong has remained a long-term strategic and economic partner of Abu Dhabi and the United Arab Emirates. This co-operation augments ADGM’s commitment in supporting the growth and financial developments of Abu Dhabi and the Middle East, Africa and greater Asia regions.”
In March of this year, London played host to the Innovate Finance Global Summit – sponsored by Deloitte as one the world’s premier fintech conferences. The event was attended by regulators from 20 jurisdictions, and focused on the interconnection of international fintech hubs and the benefits of more effective collaboration. A further discussion point surrounded so called fintech-bridges, such as this latest agreement between the HKMA and FSRA, and on how regulators could help to foster innovation.
Meanwhile, the Asian region is fast becoming the global centre of gravity for the fintech sector, with a recent Cognizant report noting that fintech financing across the region was higher than in both the US and Europe combined during the 2015-2016 period – worth nearly $10 billion in total at the time according to a separate Accenture analysis. And while China, Singapore and Hong Kong lead the way, there’s still plenty of room for rapid growth in emerging markets such as Vietnam, which Asian strategy firm Solidiance recently projected could grow from a worth of $4.4 billion last year to $7.8 billion in just the next two years.
