Asia's fintech competitiveness 'a disadvantage', says report, Latest Business News - The New Paper

Asia's fintech competitiveness 'a disadvantage', says report

This article is more than 12 months old

HONG KONG: Asia's competitiveness in fintech is being undermined by the rivalry among the region's financial centres that has created regulatory complexity and uncertainty, a financial lobby group warned.

Governments across Asia - most notably Hong Kong and Singapore - have launched a raft of initiatives to grab a slice of the US$100 billion (S$140 billion) invested in fintech globally, but the regulatory hotchpotch is making it tough for firms to scale up, the Asia Securities Industry and Financial Markets Association (ASIFMA) said in a report yesterday.

ASIFMA, which represents global banks and asset managers such as Goldman Sachs, has called on Asian regulators to coordinate better and adopt a consistent set of practices for fostering fintech in the region.

"By not cooperating on fintech, Asian financial centres are putting themselves at a real disadvantage relative to the rest of the world. That traditional competitive dynamic and rivalry between the likes of Hong Kong and Singapore may actually in this case be a disadvantage," said Ms Hannah Cassidy, partner at Herbert Smith Freehills in Hong Kong, which contributed to the report.

Hong Kong, Singapore, Australia, Japan, South Korea and Malaysia have launched a range of programmes to attract and foster fintech ventures.

While these markets operate well-defined licensing and supervisory regimes for traditional financial firms, regulators are struggling to set clear and consistent regimes for fintech firms as they operate innovative business models.

Cryptocurrency exchanges, for example, are licensed as money changers and regulated by the customs authority in Hong Kong, but they are licensed as online shopping malls in South Korea.

This makes it expensive for fintech firms based in places with small domestic markets like Hong Kong, Singapore and Australia to expand because they are basically starting from scratch each time they enter a new country, said Mr Aurelien Menant, chief executive officer of Hong Kong bitcoin exchange - REUTERS

hong kongSingaporeFinance