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HKEX inks AI MoU with insurance firm

Hong Kong Exchanges and Clearing signed a memorandum of understanding with a Chinese financial giant to explore potential collaboration in fintech and data analytics to enhance Hong Kong’s financial market ecosystem.

HKEX’s Chief Executive was present in Shenzhen to sign the MoU which also placed a focus on fintech solutions across asset classes and the application of artificial intelligence to support connectivity of mainland Chinese, Hong Kong and international markets.

It highlights the move as part of its technology-empowered initiatives, one of three cornerstones of a broader strategic plan to modernise the HKEX.

The financial giant and HKEX will seek cooperation to facilitate HKEX in realizing its new vision of connecting China with the rest of the word it was noted.

The statement’s claim to focus on the application of data analytics and AI may have a familiar ring. The firm recently shared that its potential ambitions include acting as a vendor of its tech capabilities, rather than as a direct competitor in digital banking.

The firm’s fintech arm, OneConnect, also recently applied and successfully received a digital banking license in Hong Kong. The platform serves over 600 banks and 80 insurance companies in China and internationally, HKEX said in a statement.

According to the Co-Chief Executive of the firm, the company applied through the fintech arm and not its financial entities deliberately as it was not particularly interested in competing in a crowded Hong Kong market. Instead, it would act as a provider of digital banking capabilities after an initial period of direct lending.

Boosting fintech in Hong Kong

In its coverage of the Hong Kong 2019 Budget, OpenGov Asia noted that the Government will support the implementation of various measures, including those proposed in the Policy Address by providing new resources ready for use. These new resources amount to about US$150 billion in this Budget, with additional resources earmarked for various purposes.

Hong Kong currently has over 550 financial technologies (FinTech) companies with wide business coverage, and the Government has been working to provide a conducive environment for Mainland and overseas FinTech companies to work in.

In 2018, there was significant progress in the application of Fintech. The Faster Payment System (FPS) and the Common QR Code Standard for Retail Payments launched by the Hong Kong Monetary Authority (HKMA) in September 2018 received an overwhelming response.

The Government is working to use the FPS to provide the public with greater convenience in paying taxes, rates and water charges. The Transport Department, the Immigration Department and the Leisure and Cultural Services Department (LCSD) will examine the feasibility of accepting payments through the FPS at their shroff counters on a pilot basis.

The HKMA issued its virtual banking licences and the Open Application Programming Interface functions will be implemented in phases, bringing more innovative banking services to the public.

The Insurance Authority (IA) also approved the first authorisation of virtual insurers in December 2018, marking a new chapter for insurance technology development in Hong Kong.

In addition to grooming local talent, the HKSAR Government is also working to encourage financial talent from outside to pursue their careers in Hong Kong through various talent admission schemes.

This new MoU with the Chinese financial giant will help further Hong Kong’s goals of being a more connected, technology-driven financial hub. In leveraging the firm’s tech and expertise, the citizens of Hong Kong and firms availing the services will experience better financial services.

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