As fintech companies continue to grow and garner worldwide attention, the Hong Kong Monetary Authority decided to capitalize on this. The Hong Kong Monetary Authority is establishing a regulatory “sandbox” to enable faster trials of products and to maintain competitive versus its peer countries such as China, Australia, and Singapore in the fintech race.
Effective as of September 6th 2016, the authority will “allow banks to conduct tastings and trials of newly developed products on a pilot basis. Within the sandbox, banks can try out their new fintech products without the need to achieve full compliance with HKMA’s usual supervisory requirements,” a Hong Kong regulator noted.
That being said, the sandbox is only available to banks that are looking to use fintech, and apply it to current banking methods as opposed to start-up fintech firms. As a result of this, the HKMA hopes to remain as a major innovative hub and solicit more banks to innovate within Hong Kong. Their fellow peers such as Australia and Singapore are also applying similar initiatives to push forward developments in fintech. So with Hong Kong being a major financial hub, they will need to continue to promote new development and differentiates themselves from other incubators.