August 6, 2020

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HKU FinTech Index Series Project reveals sector opportunities

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The Hong Kong FinTech Buzz Index (FBI) is a quarterly index which represents a quantified sentiment of the local FinTech-related news articles in local Chinese news media.

According to the 2,315 news articles analysed in the past three months, Hong Kong FBI for the last quarter (Q4) of 2019 is 101.3, a drop of 3.2 index points (or 2.99%) from the third quarter of 2019 (104.5 for Q3, 2019), and continuing on a downward trend from the peak in 2019Q2 and back to the level in 2018Q2.

The indices of all six subsectors moved downward, with the sub-indices for Insurance Technology and Regulatory Tech & Cybersecurity falling below the base level of 100.

The drop in the sub-index of Regulatory Technology & Cybersecurity mainly reflects negative news reports concerning regulatory compliance and cybersecurity breaches in Hong Kong, such as the misuse of e-payment apps and money laundering allegations against a crowdfunding platform in Hong Kong.

This reflects opportunities for solutions from the Regulatory Technology & Cybersecurity sector.

The reasons underlying the drop in the FBI are complicated. Since Hong Kong has experienced social unrest and political instability during this period, the public view of the Hong Kong economy including the FinTech market has turned negative in general.

The news articles also reflect an increasing level of concern by the general public about cybersecurity as well as possible risks associated with the soon-to-be-launched virtual banks.

However, this also presents several opportunities for the government, companies and financial institutions to ramp up their tech game and push forward inclusive digitalisation and support. In addition, this is a chance for them to establish a better dialogue with their customers/citizens.

About the HKU FinTech Index Series Project

The HKU FinTech Index Series Project introduces the Hong Kong FinTech Growth Index (FGI) and the Hong Kong FinTech Buzz Index (FBI) to gauge local FinTech companies’ outlook on the industry and the general sentiment on the sector as reported by the local press.

It is the first in the region to provide index indicators on the development of the sector, with an aim to provide information in a timely manner to track the growth and development of the financial technology industry in Hong Kong.

FGI is a yearly index with four sub-indices on Business Environment, Business Performance, Investment on R&D and Demand on Talent.

It reflects Hong Kong FinTech sector’s forecast of the market situation in the coming year and an assessment of the situation in the current year.

FBI is a quarterly index representing a quantified sentiment of the local FinTech-related news articles in Chinese in the past three months.

The index has a base value of 100 points which represents the sentiment of nearly 10K FinTech related news articles in major local news media outlets in 2016 and 2017.

FBI is further broken down into six sectors: Insurance Technology (InsurTech), Wealth Management and Credit Technology (WealthTech & CreditTech), Blockchain & Cryptocurrency, E-Payment & Digital Banking, Regulatory Technology (RegTech) & Cybersecurity and other related business including AI and big data.

The project was initiated by the technology transfer company of the University and is led by a professor from the Department of Statistics and Actuarial Science of the Faculty of Science. The five-year project is sponsored by Suoxinda Data Technology Co. Ltd headquartered in Shenzhen.

About HKU FinTech Index Advisory Board

The Advisory Board comprises professionals from the University of Hong Kong and the local FinTech industry, including representatives from FinTech Association of Hong Kong, InvestHK, Cyberport, Hong Kong Science and Technology Parks Corporation, and The Bank of East Asia, Limited.

The members provide expert advice on the FinTech companies to be included in the master list for the annual survey to return the FinTech Growth Index. They also advise the Project on index methodology.

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