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Analysis and Outlook of Fintech Development in Hong Kong and Singapore

In recent years, Hong Kong and Singapore have been competing fiercely in becoming a fintech center. The two places started their journeys at a similar time and have made some progress. This article outlines the landscape of global fintech development, analyzes how Hong Kong and Singapore develop the ecosystem in their respective markets, and explores the next development direction for Hong Kong.

1. Hong Kong and Singapore are only getting started

Global fintech developed rapidly over the past six years, with rising investment amount and activities. According to KPMG, there were 2,196 deals investing in fintech companies across the globe in 2018, or 31 deals more than the previous year. However, investment amount surged 1.2 times to USD 111.8 billion during the same period, led by three mega deals with over USD 10 billion per investment. As such, the rise of investment amount considerably outpaced the number of deals. As new competitors enter the market, existing fintech companies need to increase investment to maintain competitiveness or expand their businesses. Hence, global fintech is likely to maintain relatively fast growth in the near future.

Fintech investment activities are most active in the US among different countries and regions. Investment in the US reached USD 52.5 billion in 2018, accounting for 47% of global total. In Europe, most of the fintech investment activities came from the UK which accounted for 19% of global total. Besides the UK, there were fintech investments in Germany, France and Ireland. In Asia-Pacific region, vast majority of investment activities came from the Mainland, hitting USD 18.2 billion with 16% of global total. Nevertheless, investment amounts in Singapore and Hong Kong were USD 370 million and USD 190 million respectively, merely 0.3% and 0.2% of global total. Fintech development in these two places is only getting started judging from a global perspective, and there is tremendous room for development in the future.

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Content provided by Bank of China (Hong Kong)
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