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By Shimron Singh | June 9th, 2023

Fintech is taking over Hong Kong! According to the latest PolyU-Asklora Fintech Adoption Index, 94% of Hong Kong residents aged 18 or above are using at least one type of fintech product, with 74% using at least two.

Digital Payments Lead the Way

Digital payments are the most popular fintech product, with 91% of respondents stating that they use them. It’s no surprise that digital payments are becoming ubiquitous in Hong Kong since they’re so convenient for making day-to-day purchases and peer-to-peer money transfers.

Virtual Wealth and Virtual Banking Gain Popularity

Virtual wealth and virtual banking are also gaining popularity, with adoption rates of 57% and 55%, respectively. Virtual banking is mainly used for electronic money transfers and bill payments, while virtual insurance is mainly used for purchasing one-time or short-term coverage for less than a year.

Emerging Crypto Assets as a New Asset Class

But what’s really interesting is that virtual assets, including cryptocurrency and NFTs, are emerging as a new asset class. The study found that 23% of respondents are using virtual assets, and 26% are using NFTs. While adoption rates for these products are modest, there is a significant overlap between users of virtual wealth and users of virtual assets. This suggests that tech-savvy investors are willing to explore new technology and investment opportunities.

Government Encourages Fintech Development

Hong Kong’s government has been encouraging fintech development through its Fintech 2025 strategy, which focuses on creating a favorable regulatory landscape and expanding the fintech workforce. The city’s regulators are also preparing a new licensing regime for virtual asset exchanges, which is expected to allow retail investors to trade major tokens like bitcoin and ether.

Fintech is Here to Stay

Overall, the PolyU-Asklora Fintech Adoption Index shows that fintech is becoming increasingly popular in Hong Kong, with digital payments being the most widely adopted product. As virtual assets, including cryptocurrency and NFTs, emerge as a new asset class, it will be interesting to see how the city’s regulators respond. Hong Kong’s government is already taking steps to encourage fintech development, and it’s likely that we’ll see more innovation and growth in the future. Fintech is changing the way we think about money and investments, and it’s clear that it will continue to have a significant impact on the financial landscape in Hong Kong and beyond.

Featured Image by Roger Brown