Funds, Fintech and Hong Kong's Future
The rapid development of fintech solutions for fund management and distribution in mainland China contrasts with the traditional approach maintained by many fund managers in Hong Kong. While the city is bidding to become a fintech hub, asset managers wanting to use it as a base to access the mainland market may need to rapidly consider updating their systems and practices.
BNY Mellon’s latest paper reveals fund management in the city has not kept pace with the speed of technological development seen on the mainland. With many fund managers looking to use Hong Kong as a base from which to access China’s rapidly expanding market, the contrast is increasingly apparent.
Key highlights of the paper include:
- Two-Speed Tech Transformation – As an open market that is subject to strict regulation, Hong Kong cannot revolutionize its processes and platforms overnight. By contrast, driven by the size of the population and a less stringent regulatory regime, the pace of development of the fund management industry in China has grown faster allowing new entrants to “leapfrog” established players by offering services on the latest technology.
- Fintech Fever - Hong Kong is seeking to maintain pace with other regions vying to establish themselves as fintech hubs, such as Singapore, which also signed a bridge agreement with UK regulators last year and has been aggressively pursuing fintech investment.
- The "Uberization" of Fund Management - Distribution is only one aspect where change is needed. Increasingly, fund managers can benefit from the adoption of open-source, cloud-based ecosystems that offer a range of fund management support services through application program interfaces (APIs).
Read the full paper to explore these points in depth.