Hong Kong Banking Fintech Platform to Tie up with PBOC

Hong Kong banks and fintech tech firms will work more closely with Chinese banking regulators in developing trial fintech services following an agreement between the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC). 

The HKMA already operates a Fintech Supervisory Sandbox that allows banks and partnering technology firms to trial their fintech initiatives with a limited number of participating customers without being subject to full HKMA's compliance. 

As of the end of September 2021, a total of 225 fintech initiatives had been trialed under the program. In addition, Hong Kong banks have collaborated with tech firms in 165 trial cases. The platform allows banks and tech firms that use to gather data and user feedback to refine their efforts before launch. 

Under the Memorandum of Understanding, Hong Kong’s Fintech Supervisory Sandbox, established in 2016, and the PBOC’s fintech innovation facility will be linked up and cooperate on fintech projects to be tested.

The move comes after Chinese regulators earlier this year sought to tighten oversight of fintech companies that had largely escaped the gaze of regulators. 

Some fintech firms had engaged in P2P lending, microfinance, and issuing asset-backed securities with little impunity, leading the China Banking and Insurance Regulatory Commission, in March affirming that fintech players would be subject to the same capital adequacy regime as banks.