February 27, 2024

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HKU releases latest FinTech Indices

Image Credits: HKU, Press Release

The HKU FinTech Index Series Project published the second-year Hong Kong FinTech Growth Index (FGI) and the 2020Q1 Hong Kong FinTech Buzz Index (FBI) to gauge local FinTech companies’ outlook and the general sentiment on the sector as reported by the local press.

Hong Kong FinTech Growth Index 2020

The FGI represents responses to an annual survey by 27 companies, 11 less than last year.

The Hong Kong FGI for the financial year 2019-20 is 120.9, up 20.9 index points from 2018-19. The FGI expected for the financial year 2020-21 is 133.6, an increase of 12.7 index points (or 10.5%), representing a positive outlook for Fintech development in Hong Kong in the coming year despite the impact from the anti-extradition bill protests and COVID-19 outbreak.

Of the four sub-indices, the Business Environment sub-index, measured by both internal and external factors on FinTech business operations and development, is 105.8, 5.8% higher than 2018-19.

The sub-index is expected to increase by 9% to 115.8 in 2020-21, attributing to improvement in external factors including more funding opportunities and a safer and more stable investment environment in the coming year.

The Business Performance sub-index, measured by FinTech customer adoption rate and revenue, is 143.4, 43.4% higher than 2018-19, and is expected to increase by 28.4% to 184.1 in 2020-21, representing a positive outlook in business development by the FinTech industry.

Of the companies that responded, 70.4% mentioned talents acquisition as the main challenge in business operation which has become more difficult.

The Investment on R&D or Product Development sub-index is 126.6 for 2019-20, 26.6% higher than 2018-19 and is expected to drop by 2% to 124.1 in 2020-21. The downturn can be attributed to FinTech companies lowering their investment in R&D or product development.

The Demands on Talents sub-index is 107.9, 7.9% higher than 2018-19 and is expected to increase by 3% to 110.6 in 2020-21. The expected growth rate is lower than sub-indices Business Environment and Performance which indicates that companies are turning conservative in hiring talents due to the downside revenue risk.

On the required skills for new employees, programming skills (85.2%) is the most preferred skills by employers, followed by marketing expertise (48.1%). IT infrastructure skills (42.1%) have evolved to be a more important skill set than in 2018-19.

Hong Kong FinTech Buzz Index – 2020Q1

Around 1,000 news articles in the first three months from January to March 2020 were analysed. Hong Kong FBI for the first quarter (Q1) of 2020 is 100.3, a drop of 1 index point (or 0.98%) from 101.3 in the last quarter of 2019 (2019Q4). The YoY change drops by 3.5 index points, or a 3.37% decrease from 103.8 in 2019Q1, continuing a downward trend from the peak in 2019Q2.

Indices of the six subsectors show different changes, with increases recorded in three sub-indices: Insurance Technology (InsurTech), Wealth Technology and Credit Technology (WealthTech & CreditTech), and Regulatory Technology (RegTech) & Cybersecurity.

Positive news in InsurTech was related to banks in Hong Kong switching to promote online insurance under COVID-19 which has facilitated the growth of related technology.

Moreover, the launch of virtual banks has proved the successful use of sandbox to ensure cybersecurity, hence resulting in positive news in RegTech & Cybersecurity as well as WealthTech & CreditTech.

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, intending to provide information promptly 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 assesses 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.

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Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

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Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

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SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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