While I am talking about LiveDataset, I am learning a lot about China and Hong Kong, and the Financial Technology environment here.
It’s a fantastic opportunity to see how halfway round the world, the striking similarities in how the technical and financial worlds come together – but set against an Asian backdrop instead of a European one.
This morning we met with a number of journalists and a VC based in Hong Kong. I wanted to share my notes as the journalists’ questions, and subsequent discussions brought together several interesting themes that had come up during our visit.
How Do London and Hong Kong Compare as FinTech Centres?
UKTI: FinTech is rapidly growing in all financial marketplaces, but it is growing particularly fast in London where there is a rich heritage of financial acumen and technical expertise.
Nest: Hong Kong is fast-growing too. There is a thriving startup community, well supported by government and private investor initiatives.
Krescendo: New York markets are characterised by high-volume. The London markets are more complex with multi-currency, and act as a hub between East and West. The Hong Kong financial environment, in respect to Asia region comes across as more similar to London.
FundApps: Regulation and compliance are a key trend across the financial industry and it is not going to go away. Automation is key to stay on top of it if you want to trade globally and avoid large non-compliance fines.
Nest: Hong Kong, like London and New York, enjoys Government and private investments – creating communities, sharing resources and connections to help companies thrive. It fosters entrepreneurship, for example DBS (a Singapore bank) has set up an incubator initiative attracting over 100 startup applicants in Hong Kong.
How Does the Turmoil in China and Greece Affect Fintech?
Nest: Market shocks and crises are an opportunity to help the financial industry increase transparency and compliance through better, more efficient technology.
Sybenetix: Behavioural analytics help reduce hasty decision making, taking the emotion out investing and helping people to manage market volatility in more skilful ways. This software also ensures conduct management occurs with every single trade. So when dramatic market events occur there is more confidence in investment performance and reputation management.
Krescendo: Technology enables more speed and more efficiency. Crises point the spotlight at the darker, neglected areas where technology can often step in to bridge the gap. The value of technology is not only to make money, but also to save money – through admin efficiency and better strategies for asset utilisation.
FundApps: In the UK Fintech is very disruptive, it is thriving on change. While Hong Kong appears perhaps more conservative. For instance the “death of banking” is a trendy narrative in the UK, where Fintech is promoting the opportunity to reshaping the entire financial landscape. The traditional models are being challenged – everything is being brought into question.
Are You Looking at China as a Potential Market?
LMAX: We recently set up a regional office in Hong Kong. Primarily established Asia operational support complementing the establishment of our Tokyo Exchange. Our type 3 regulated broker is also geared at on-boarding institutional clients in the APAX region and is well positioned should regulation develop to allow the on-boarding of Chinese financial institutions.
Nest: As a VC, based in Hong Kong we work on the basis of global collaboration in a globally-connected world. Such as actively collaborating with Level39, Europe’s largest Fintech accelerator and the DBS accelerator in Hong Kong.
Sybenetix: Yes, investment performance and conduct management and important issues be it in the US, Europe or China. Investment professionals need tools to help them with decision making and compliance. Fintech companies can support this from anywhere, but opportunities in Asia can be better enabled with offices in the region.
Is There a Danger of Malpractice in Financial Markets?
Nest: Being good is not sufficient. It is essential to be seen to be good.
LMAX: It is important to drive best practices and provides transparency in an otherwise opaque market.
FundApps: Regulation and transparency are an unstoppable trend. A faster, more-connected world needs needs better controls that can be tech-enabled. For example, the reliance on spreadsheets must be reduced and more controllable systems globally.
Krescendo: Information security practices are now more thorough and globally standardised. Until 4-5 years ago, everyone had their own ad hoc audit practice. Now, global certifications such as ISO27001 ensure consistent coverage and, with annual recertifications, there is a serious commitment to continuous improvement.
Hong Kong Journalists
Chester Kwok
International News Reporter
Hong Kong Economic Journal
Bien Perez
Senior Reporter, Technology
South China Morning Post
Hong Kong VC
Lawrence Morgan
Chief Operating Officer
Nest
UK Trade & Industry
Malcolm Cohen
London Trade Mission chief
Jo Hawley
Director of Trade and Investment
UK FinTech Delegates
Gabriele Albarosa
Chief Executive Officer
Krescendo
Richard Maton
Chief Marketing and Strategy Officer
Sybenetix
Vikash Thanki
Head of Hong Kong Operations
LMAX
Andrew White
Chief Executive Officer
FundApps