The recent re-opening of the border between Hong Kong and mainland China is signalling an exciting increase to the already prolific fintech organisations operating within the city. The low levels of uncertainty that have dominated the stock market over the last couple of years are quickly turning to certainty and with that certainty comes an increased appetite for investment.
With the support of mainland China, Hong Kong looks set to exploit a wealth of opportunities, across a wide range of industries, with the one that will generate most excitement being fintech. Hong Kong is already home to over 800 fintech organisations, the success of which is directly attributed to strong government support, ongoing investment in talent and an open trading market that is supported by a robust regime of regulation.
Why was the border closed
The Chinese border closed on the 28th March 2020 to combat the spread of coronavirus, with passage only allowed for reasons of emergency humanitarian needs or to perform essential trade, economic, scientific and technological activities.
Its reopening on the 6th February 2023 was met with relief and considerable fanfare from individuals and businesses alike who are keen to rekindle relationships, both professional and personal, and to continue to develop the financial growth that will firmly secure Hong Kong's position in the international financial marketplace.
Likely impact from reopening
Work is already underway to enhance the fintech infrastructure within the city, to encourage innovation in financial technologies and to attract new talent to the industry. Investment into sandboxes to promote development within the industry is set to position the city as an attractive option for startups and established businesses that are seeking to enact aggressive growth and business expansion plans.
Banks in the country are already benefiting from increased margins which have been attributed to the higher interest rates but they are continuing to urge caution as cost reduction remains a key focus this year. This emphasis on cost reduction aims to deliver a long-term and sustainable cost to income ratio and enhanced profitability against the backdrop of a cool economic outlook.
Whilst it is recognised that investment in crypto can deliver significant profits, blockchain technology will likely be pursued with renewed vigour in order to protect the industry from the risk exposure that is traditionally associated with crypto investments.
Increased disclosure will become mandatory so the costs of complying with new regulations will be a challenge that foreign banks will need to overcome whilst maintaining growth and profitability. Avenues for foreign investment will likely be explored and partnerships and other initiatives entered into to deliver mutual benefit.
Jobs in the industry
Rapid growth always represents exciting opportunities for job seekers, and the reopening of the Chinese border and the increased focus on the fintech industry means that plenty of project manager roles are likely to emerge over the coming weeks and months. This increase in demand, both in Hong Kong and within wider China, will likely offer a range of crypto careers to talented individuals that wish to enter the industry.
The fintech industry stands ready to support any developments that occur in order to maintain progress and capitalise on the unique opportunities offered by free migration between Hong Kong, mainland China and the rest of the world.
At Captar Partners, we are ideally positioned to support organisations in periods of rapid growth with the personnel that they need to achieve their business objectives, and to identify the opportunities that best align with the needs and desires of job seekers. We are experts in our field with an unrivalled knowledge of the Hong Kong fintech industry, so why not contact us today to see how we can help you to bring certainty to your economic outlook.