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Highlighting Hong Kong’s Growing RegTech Strength

Hong Kong Science and Technology Parks Corporation (HKSTP) announced that Park two companies triumphed at the recent Global Regtech Challenge, organised by The Hong Kong Monetary Authority (HKMA). One company, an AI start-up, won in the Conduct and Customer Protection category, while the other firm, an AI and blockchain start-up, was selected as runner up in the Customer Data Privacy category.

The CEO of HKSTP noted that the success of the Park’s start-ups is proof of Hong Kong’s Regtech innovation potential and its growing status as a global Regtech hub. The winning solutions are just a sample of the significant wealth of innovation emerging from HKSTP’s ecosystem of deeptech-driven fintech companies, creating a pipeline of impactful innovation and powering Hong Kong’s financial sector.

The Hong Kong-based AI provider specialises in speech and natural language processing technologies; they triumphed as the best solution in Banking Conduct and Customer Protection. Its AI technology, specifically the Callinter product, is used to automatically analyse multilingual and mixed language (Cantonese, Mandarin, and English) conversations between a relationship manager and a customer, to help identify potential regulatory breaches, suspicious activities and business insight.

The Co-Founder and CEO of the AI start-up stated that with HKMA’s two-year roadmap to promote Regtech adoption and the Fintech 2025 strategy, a golden opportunity for growth has been presented to the firm. The company’s technologies have been adopted by several of the largest international banks and regulators in the region. The firm looks forward to engaging with its partners to work towards the FinTech 2025 goal and make Hong Kong a leading global hub for developing Regtech.

Meanwhile, the second start-up, an AI and blockchain technology provider was selected as runner-up for their Customer Data Privacy category at the Global Regtech Challenge. Its SafeGuard Series is a comprehensive cybersecurity solution that tackles both internal and external threats by integrating facial recognition, object detection and blockchain technologies.

HMKA launched the challenge to raise the Hong Kong banking industry’s awareness of the potential of Regtech adoption. The competition drew over 80 submissions from 15 jurisdictions and four continents. The two HKSTP start-ups beat out Regtech providers from around the world, who were invited to showcase applications in solving common risk management and regulatory compliance pain points experienced by banks, including governance, risk and compliance; conduct and customer protection; customer data privacy; and risk management.

On 17 June 2021, the Hong Kong Monetary Authority (HKMA) launched a new Regtech Adoption Practice Guide series to provide banks with detailed practical guidance on the implementation of Regtech solutions.

The publication of the Regtech Adoption Practice Guide series forms part of the HKMA’s two-year Regtech promotion roadmap announced in November 2020. It succeeds the Regtech Watch series and builds on it to provide banks with detailed guidance on how to overcome implementation challenges associated with Regtech adoption.

Each Regtech Adoption Practice Guide focuses on a specific technology or application area identified in the HKMA’s White Paper to further Regtech adoption in the Hong Kong banking sector.  The inaugural issue provides guidance on “Cloud-based Regtech solutions”.

As noted in the first issue of the Practice Guide, Cloud computing is a key underpinning technology behind Regtech solutions.  The use of Cloud technology on Regtech solutions offers several benefits including timely offsite support, fast implementation and highly scalable solutions. Findings from the White Paper suggested that banks that were open to using Cloud-based technology displayed greater operational resilience during the COVID-19 pandemic.

The HKMA also published today the seventh and final issue of the Regtech Watch series. This last issue outlines the HKMA’s three-year roadmap to integrate supervisory technology (Suptech) into its processes.  Through greater use of Suptech, the HKMA aims to enhance the effectiveness and forward-looking capability of its supervisory processes.

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