Hong Kong has launched a regulatory regime known as a ‘sandbox’ for financial technology innovation in the banking sector. The initiative is expected to maintain Hong Kong’s competitiveness as a financial hub by supporting the development of fintech in the banking sector, said Norman Chan, chief executive of the Hong Kong Monetary Authority (HKMA). He said the sandbox allows banks to conduct testings and trials of newly developed technology on a pilot basis. Within the sandbox, banks can try out their new fintech products without the need to achieve full compliance with the HKMA’s usual supervisory requirements. He added that a financial center must remain diligent all the time if Hong Kong wishes to continue to maintain its competitive edge, although he did not believe Hong Kong was lagging rival fintech hubs. The sandbox will only apply to banks looking to use fintech, such as distributed ledger technology or robo-advisory, as opposed to start-up fintech firms, the HKMA said.
