In a recent report titled Hong Kong Banking Outlook 2017, KPMG expresses an optimistic view of Hong Kong’s progress in the adoption of FinTech, but also urges caution in its future handling of blockchain technology. The report recognizes the financial industry’s increased interest in distributed ledger technology, and the accompanying rise in FinTech investment throughout Hong Kong – investment that has helped to jump-start FinTech innovation in the region. KPMG’s analysis anticipates future investment growth over the coming year.
The KPMG report gives prominent mention to the Hong Kong Monetary Authority (HKMA) for its work in pushing further research into FinTech and distributed ledger solutions – citing the creation of the FinTech Facilitation Office and the 2016 HKMA report on blockchain technology. The authors also note the importance of recognizing the regulatory and legal concerns associated with this new technology. While acknowledging that blockchain firms have been attracting a great deal of investment funding, the report suggests a cautious approach to adoption:
“[T]he HKMA emphasised in its recent report on Distributed Ledger Technology that despite its ability to save time and money, blockchain technology also raises significant legal and regulatory issues. While this should not detract Hong Kong banks from exploring blockchain opportunities, they should also carefully monitor regulatory developments and take steps to enhance their risk management procedures around this new technology."