Asian Tiger Moms (ATM) once wanted their kids to hit the books after school but Jessica Tan, co-CEO of insurance giant Ping An and a self-confessed ATM, wants to bring her teenage daughter to work. “Do something that will have a lasting and meaningful impact,” she tells her daughter and her team.
She was speaking at a panel at the Hong Kong Fintech Week that also involved Christopher Hui Ching-yu, the Secretary of Financial Services and the Treasury in Hong Kong. The government official said the city was ready to play a role as the banker for the Greater Bay Area, an infrastructure project that will seek to connect Hong Kong with 12 nearby cities including the technology hub of Shenzhen. That is a population of 70 million people with a total economy of $1.5 trillion and it will surely attract considerable financial interest.
“If you look at the assets under management in Hong Kong, it’s ten times the size of the economy,” said Hui. “Nearly 62% of the money goes out of Hong Kong.”
“We are a good asset manager for China and the rest of the world.”
Imagine a metropolitan area that has both San Francisco and New York in close proximity and you might get the idea.
There is clearly a lot of buzz in activity, excitement and hope in Hong Kong now. Coronavirus cases are in the single digits. It may not be long until people in Hong Kong will be allowed to travel to China without enduring a 14-day quarantine upon arrival.
Tan also explained why Ping An paid HK$11.27 billion ($1.45 billion) for office space in the city earlier in the year. Ping An, a Chinese fintech giant, believes in Hong Kong’s potential and aspiration to transform from a city of bankers to one known for technologists. Right now, the city has 260,000 professionals in the financial services sector. They helped generate an impressive HK$2.86 trillion last year ($368.8 billion).
Elsewhere, the main story from the five-day festival involved discussions over a new regulatory regime that will regulate trading of virtual assets like Bitcoin. There are strict rules that cryptocurrency firms will need to follow if they want to target investors in Hong Kong but the stamp of approval they get could be worth the effort.
A consistent theme mentioned across panels was how there is still a long way to go for technology to fulfil its bold claims in wanting to make life easier for the common man. Beyond payments, there are many ways technological solutions can make financial processes cheaper, more convenient and secure.
For example, Tan’s colleague Ryan Fung, the CEO of PingAn OneConnect Bank (a virtual bank), outlined in a separate panel how they used alternative credit data to help small and medium enterprises (SMEs) get collateral-free trade loans digitally in Hong Kong. Nearly 80% of applicants had never received one without providing collateral.
“Old methods won’t create a difference,” he said.
Ping An’s credit arm proved itself in south China this year. It helped local provincial governments disburse ¥60 billion ($9 billion) in loans to more than 600,000 small and medium enterprises at the onset of the pandemic. Nearly everything was automated – identity checks, collection of financial information – and extremely convenient.
We mention Ping An as an example but the technology giant, which also has a wealth management and credit arm, was just one of hundreds of technology companies to feature in the festival. More than 25,000 people from around the world tuned in to hear what they had to say. The technological talent in Shenzhen is tapping on Hong Kong’s financial acumen to great effect.
But not all the talk was about the panels and FinTech Week. At the start of the week, there was some drama involving Ant Financial, the payments arm of e-commerce giant Alibaba, when news filtered through late on Tuesday that the company’s initial public offering (IPO) in Shanghai and Hong Kong had been suspended. The IPO would have raised $34.5 billion for the company that powers more than half of all digital payments in China, or trillions of payments every year in a country of more than 1.39 billion people.
At a financial forum in Shanghai two weeks back, Alibaba founder Jack Ma had described European banking regulators as “an old man’s club” and the Chinese government for being too cautious. Ant Financial, which also offers quick loans for millions of people who cannot get a credit card, will soon need to do more than be a middleman between banks and foot part of every loan.
It showed in stark terms the importance of stakeholder management. Even Hong Kong-based start-ups are learning that what one says or does in a particular context may not work well elsewhere.
“We must work to change our habits,” said Andy Chan, Co-Founder of Qupital, a fintech that seeks to help SMEs get paid faster. “We must also use Mandarin and embrace Chinese culture in our teams. We all need to make changes.”
Tan’s daughters are surely learning all that and more as they get to intern even before they finish high school.