Slides used during the "FinTech in Asia" event organised by FinTech Circle and Hosted by Morrison & Foerster. Held in London on the 2nd of February 2015

1. FinTech in Asia
CURRENT REGIONAL LANDSCAPE AND OPPORTUNITIES
Monday, 2 February 2015
Janos Barberis
Organised by: Hosted by:

2. Contents
1. Regional Landscape
2. China Case Study
3. Hong Kong as a FinTech Hub
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

3. FinTech Overview
and the Asian Market

4. FinTech Market Overview
Global Market
Established Hubs
Investment Levels
US$ 3 Billion
x3 in 2018
LDN
1st
Growth
NYC
1st
Nominal
&
A wide range of applications within Financial
Sector:
•Payments
•Lending
•Crowdfunding
•Data and analytics
•Personal Finance
•Money Transfer
•Digital Currencies
• etc …
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

5. FinTech Market Overview
Asian Opportunities
Selection of Current Market Opportunities
Great but…
Fragmented market: 25 jurisdictions in Asia Pacific
Different levels of development: Infrastructure, Regulation, Behaviour
1.2bn
Unbanked
620m
Digital Banking
Customers
66%
World middle
Class
4.3m
HNWIs
US$300bn
SME Credit Gap
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

6. But Why FinTech?
Infrastructure mismatch (e.g. ATMs per 100,000)
New Business Models (e.g. Bank + Telco, new licence)
Big Market Growth
Who Will Get the Market?
Is comparing adequate, different models?
 Singapore: Off-Shore Financial Centre
 Hong Kong: Gateway Financial Centre
Q: Should FinTech start by supercharging existing
strengths of financial centres? (e.g. Hong Kong:
RMB, Gateway Investment, Payments, Trade?)
12.5
Asia
62.5
EU
US$ 5bn+
Opportunity
SGN HK SDY
1.7bn (x3)
Digital Banking Customers by 2020
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK
“Payment
Banks”

7. China:
Case Study – Reasons behind the growth of Internet Finance

8. In The News
Alibaba IPO
5 New Private Banks (e.g. Tencent, Alibaba…)
47+ new P2P lending platform in December
US$ 6.5bn available for start-ups
…
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

9. Digital Banking Trends in China
+111m
Internet
Banking
Customers
+19%
New Bank
Accounts
+24%
Using Online
Payments
Trends between 2010 – 2013:
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

10. Why Going Digital?
Infrastructure Benchmarking:
Other Market Facts
China USA UK
# Unbanked 432m 10m 1m
% Unbanked 36% 2.7% 2.5%
Branches (per 100k) 7.7 35 25
ATM (per 100k) 37 173 124
China
Phones 1.1 bn
Internet
Users
600m
Infrastructure Mismatch
+ Market Opportunity
= fundamental reshaping for finance
(e.g. build financial regulations around
FinTech, instead of adapting it to current
Framework)
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

11. Replacing or Fixing Formal Banking?
Inefficient formal banking fostered the creation of alternative sectors:
• 20th Century: Shadow Banking
• 21st Century: Internet Finance Companies
Internet Finance Companies are performing a useful role:
◦ Fix miss-allocation of financial resources (e.g. SME Funding)
◦ Brings efficiency and automates an otherwise discretionary system
Broader Economic Impact:
◦ 400,000 SMEs funded via Alibaba Loans
◦ 2.7 million job creations
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

12. Hong Kong:
A financial centre for the 21st Century

13. Why Hong Kong as a FinTech Hub?
Current Importance of Finance for Hong Kong:
15.9%
of GDP
6%
of workforce
12%
of exports
3th
Financial
Centre
What about tomorrow?
Finance and the economy is increasingly
digital.
How can we uphold the objective to:
“provide an appropriate economic and legal
environment for the maintenance of the status
of Hong Kong as an international financial
centre” Article 109 – The Basic Law
Leverage on current strengths as a financial
centre? Create new sectors? Both?
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

14. Current Trends
Hong Kong has already started to develop its start-up eco-system:
x10
More co-working
spaces available
since 2010
43%
Increase in
applications for
StartmeUp HK
US$50m
Assigned for
social innovation
&
entrepreneurship
1st
In terms of
attractiveness to
launch a start-up
600+
Start-ups located
across Hong Kong
70
Of the world’s
100 largest banks
are based in HK
HK$ 1Bn
Alibaba Foundation to
promote
entrepreneurship
FinTech will follow shortly…
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK

15. How to develop the sector
First - Set a Strategic Focus for Hong Kong
 What is the vision?
 What are the markets?
 What are the strengths?
 Who are the influencers?
Second: Put on the right tracks for a high-growth
market.
Human
Capital
Financial
Capital
Market
Opportunities
Contact: Janos@FinTech.HKWebsite: www.FinTech.HK