Neat Fix for the Cash-Strapped


A digital wallet might be considered an alternative payment option, but it is fast becoming a choice for cash storage too. Local start-up Neat is using the technology to help millennials and small businesses access traditional banking services not available to them.

Neat services the “underbanked” – students, freelancers, first-time jobholders and expatriate entrepreneurs with difficulties opening a bank account. It allows them to receive and pay money with a digital bank account and a prepaid Mastercard.

Traditional banks often see these customers as “unprofitable” because they tend to earn low incomes, have a low credit score, and have no interest in purchasing high-value products, such as structured investment products.

“A student has no money so banks do not really care about them. And typically, banks don’t give a credit card for businesses on their first year. That’s a big problem,” said David Rosa, a former banker who founded Neat in 2015.

“We went through the same emotions everybody has as a start-up. We had a long dialogue with the bank before we managed to open an account.

“Even if businesses have corporate credit cards, the cards have very low limit. The statement comes once a month. It’s like driving a car using just a rear view mirror.”

Neat is one of the 13 mobile payment companies that received a license under the “stored value facilities” regulation introduced by the Hong Kong Monetary Authority in November. It is the only company that targets the “underbanked” segment.

The “underbanked” segment is largely underserved worldwide. It is estimated that 12 percent of Hong Kong’s population, and close to 1.2 billion people in the Asia Pacific, lack adequate access to formal banking services, according to local start-up Fintech HK.

With Neat as an alternative banking option, users can make deposits to their digital account through internet banking or the Bank of China’s ATM machines. Each Mastercard that Neat issues has a deposit limit of HK$100,000.

Opening a digital account, peer-to- peer money transfer and real-time balance check are done entirely via a mobile app.

To open an account, users have to provide passport details and proof of residence, as well as taking a selfie to verify an account applicant’s identity. Neat will do due diligence and turn down applicants who might use their accounts for money laundering and terrorist financing.

Neat does not charge individual account holders, but fees will apply to corporate account holders. Many users are expatriates currently working in the SAR. And since the start-up was launched in December, it had a 55-percent monthly growth on new registration.

“We are 15 times cheaper than a bank in terms of acquiring and maintaining a customer because we don’t have a physical branch. That’s meaningful because we can afford to deal with customers who are not normally attractive from a revenue point of view,” Rosa said.

The start-up’s monetization model relies on taking a cut of the transaction fee paid by Mastercard merchants, selling anonymized users’ behavioral data, as well as pushing promotional deals to users on its mobile platform.

It is adding a multi-currency account service, allowing customers to pay in US dollars when they shop online or travel overseas. More currencies, such as the British pound, Japanese yen, as well as the euro, will be included in the near future.

If travelers to Britain use Neat’s Mastercard and pay in local currency, they can save two to four percent on transaction fee, Rosa said.

The article first appeared in the Standard on August 7, 2017.


Amuse Bouche

Lai Yuen amusement park scion wants a bite of the restaurant business


Before smartphones transformed treasured moments into pixels to be glazed over, local businessman Deacon Chiu Te-ken dedicated himself to entertaining a generation of people, and along the way, created numerous collective memories that will last.

“My father was a man of strong character, always inventing new ideas to run his cinemas and television station,” said Duncan Chiu Tat-kun, 42, the Far East Consortium founder’s youngest of eight children. “He has been a big influence on me. I am quite like him in a way.”

Of all his entertainment ventures, an amusement park in Lai Chi Kok, known colloquially as Lai Yuen, was a source of pride to the elder Chiu. The park was demolished in 1997, but lives on as an emblem of nostalgia, evoking many cherished memories.

In 2015, the Chiu family revived Lai Yuen as a summer carnival in the Central promenade. The carnival ran for 70 days and attracted 1.2 million visitors. Sadly, the elder Chiu did not see the HK$70 million project to fruition. He died in March at the age of 90.

“We intended to bring Lai Yuen back as an one-off project, but were overwhelmed daily with requests to keep it running,” the junior Chiu said.

“That convinced me to set up a company and find new ways to re-launch the brand. We cannot rely only on selling nostalgia.”

The past year saw a new Lai Yuen emerging: a mobile theme park that has pitched camp at Asia World-Expo, and at a trade exhibition in Guangzhou.

Two weeks ago, Chiu added a cha chaan teng in Tsim Sha Tsui under Lai Yuen’s name.

The tea restaurant serves the carnival food sold at the old Lai Yuen. Classic drinks, such as cream soda with fresh milk and coconut red bean ice, are also on the menu. Paintings of the tiger cub mascot and a carousel chandelier echo the amusement park connection.

“Lai Yuen was not a full restaurant but food was part of the fun. There were many stores selling frozen pineapple slices. As kids, we would buy deep-fried chicken drumsticks after riding bumper cars,” he said.

“We’ve tried to keep up with the times by offering different cuisine, more healthy vegetable dishes and nicer presentation at the restaurant. We are not going to host a carnival this year. We have to focus on running the new cha chaan teng, which will be a permanent project.”

Although Chiu assisted his late father at work after university, assuming the chairman’s role of Lai Yuen was unintended. His full-time job is that of a tech investor. He manages a private investment firm, Radiant Venture Capital, which he co-founded in 2014.

“When I got back from the United States in 1996, the investment holding company that I looked after for the family had a bit of everything – entertainment, shops, factories in China, stocks, and a golf resort. These assets were worth some money, but they were losing money as well,” he recalled.

“In 1999, I started looking into different possible investments. I thought, as a business, the tech sector had a future. Hong Kong and China could be a start-up launchpad. Luckily enough, some of the companies I invested in survived the bust of the dot-com bubble the year later.”

His first profitable tech investment was Chinasoft International. The internet business services provider was floated in 2003, and now has a market capitalization of US$10.14 billion (HK$79.09 billion). Chiu, an early investor, sold all his shares when the company entered the main board.

Venture capital fund and amusement park are two vastly different businesses. However, they require the same taste for innovation and originality, Chiu said.

He does not intend to be only an old guard of his father’s theme park but sees himself as a business founder like his father.

“A business is easy to start, but a brand is difficult to maintain and grow. Lai Yuen is more than a theme park. It’s a homegrown label, and we intend to make it last. To do that, you cannot do away with the spirit of inventing,” Chiu said.

“That’s why, in every project, we tried to make something new based on the old elements, right down to the last decoration details. And these new ideas have to be original. Create or perish – that is the rule we have to live by in the modern world.”

The article first appeared in the Standard on June 23, 2017.

Hawking Holograms

Beam me up! Professor Stephen Hawking turned into a 3D hologram at a lecture in Hong Kong

hawking hologram

Meeting Stephen Hawking in person is already an exciting experience. But this time around, the hype was not about what the world-famous theoretical physicist said but the medium that he chose to deliver his lecture.

Hawking appeared as a hologram in front of hundreds in the audience at the Hong Kong Science Park last month. With images being beamed live from Hawking’s office in Cambridge, the technology involved goes beyond the speech synthesizer that the British scientist uses.

The holographic projection, which was slightly larger than the professor is in life-size, was created by ARHT Media. The Canadian startup has partnered with NetDragon Websoft, a Hong Kong-based online games company, to market the imaging technology in Asia.

Photo-realistic human holograms are not new. Although they are still a novelty in commercial applications, they have been used by the entertainment industry which deems the six-figure production cost affordable.

Digital Domain, the Hong Kong-based owner of the Playa Vista visual effects studio, has resurrected a number of deceased singers, such as Tupac Shakur and Teresa Teng, through its hologram project. The virtual image of Teng performed on stage with Taiwanese pop singer Jay Chou in 2013.

ARHT Media is prioritizing application in education over entertainment, though. It wants to bring its HumaGram technology to students and teachers, building a “low cost, high distribution” learning platform that will pull together “some of the best educators in the world”.

“We believe the Asian market, in particularly China, represents a fertile ground for us to realize this technology,” said Paul Duffy, president and chief executive of ARHT Media. “In Hong Kong, we are actively pursuing a number of universities and corporations.”

The demonstration event in Hong Kong showed a glimpse of what to come. During the 90-minute lecture, Hawking spoke and answered inquiries about his career, current research, and where he stands on the issue of Brexit and Donald Trump.

Despite the speaker’s immobility and monotonous computer voice, the crowd was listening attentively. The novelty factor of a hologram prolonged the audience’s attention span, with them marveling at the life-like eyes and lips movement captured and recreated on stage.

Hawking’s lecture was taped. It will be broadcast as a pay-per-view program.

“We have an open system concept, which works on all devices – television, smartphone, iPad and augmented reality headset,” said Simon Leung Lim-kin, vice chairman and executive director of NetDragon Websoft. “All the experiences that we capture will be able to be enjoyed on any devices, anytime anywhere.”

hawking at cambridge

Creating a human hologram is simpler than one would imagine. Hawking was seated in front of a green screen that measured four meters wide and eight meters tall. Multiple shots were captured in advance. However, a single-camera setup would suffice during a live broadcast.

Transmitting the hologram require technical specialty. The Toronto-based company has developed an exclusive video codec to package the audio and images that can be sent with low latency over a cloud-based media server and broadband internet connection.

“We are able to create a primary, secondary and tertiary format so we have redundancy built in the system. When we have a clean line, which is typically what happens when we set up, we are able to take a human hologram from Los Angeles to Hong Kong in 400 to 700 milliseconds,” Duffy said.

In regions such as the mainland, where landline internet connection is unstable and expensive, sending a partial hologram – only the face, instead of the full body, as an example – is one solution.

Another option for transmission is via a mobile phone network.

“We typically need anywhere from two to 10 megabytes per second for transmission. That’s the low end of 3G. So most of the transmissions that we are doing now can probably be provisioned through a cell-phone network,” he added.

Reproducing a human hologram does not require the use of a special projector. But special mesh-like screens are needed. Two screens were used at Hawking’s lecture: a nine-meter-wide, four-meter-high one fixed at mid-stage, and another in the rear of the stage.

The virtual Hawking was projected in-between the screens. It was, in fact, a two-dimensional image. But stage lighting and fancy graphics can fool the human brain, making the screens invisible and the image convincingly three-dimensional, explained an engineer of ARHT Media.

The company is creating a smaller type of special screen for schools and home users. The new screen measures twp-meter-high and one to two meters wide. Only one of them, rather than two, is required to render a hologram image.

While human hologram is not as widely popular as other existing types of video streaming technologies, important early adopters exist.

Duffy predicted that a critical mass of clientele will form when the price for purchasing projection equipment falls under US$1,000 (HK$7,800).

“The cost to build a display station is coming down dramatically. And mass proliferation of virtual reality and augmented reality headsets all make for the ability to create a fully formed human experience but in a life-size model,” he said.

“In the US, it costs from a few hundreds dollars all the way down to US$50 or US$60 a month to lease one of these projectors. It’s getting quickly into the realm of what’s possible for mass distribution.”

The article first appeared in the Standard on April 24, 2017.

Geek God

An attempt to decode a tech start-up genius


Looking dapper in crisp blue shirt and expertly cut khaki trousers, Alvin Hung Yiu-kei looks too well groomed to be your average neighborhood geek. But as the proverb goes: you cannot teach a crab to walk straight so don’t be fooled.

“I became addicted to video games in primary school – so much so that I would take apart the computer codes to modify the characters I was playing to make them become invulnerable, and have unlimited attack points and money,” said the Hong Kong native.

Cashing in on his inner geek, Hung founded GoAnimate, a California- headquartered animated video creation company in 2007. The firm has produced 22 million animations via a cloud-based platform over the last decade.

Hung’s company also has offices in Hong Kong and Taiwan. And in his Sheung Wan office, a team of 40 local employees are serving 8.5 million registered users around the world, including the US government and universities in the Golden State.

Born into a family of industrialists, Hung chose a different path from his uncle Peter Hung Hak-hip and elder brother Marvin Hung Ming-kei, who still manage the family’s cooking oil and restaurant empire.

Hung’s late grandfather was founder of the Hong Kong-listed Hop Hing Group Holdings, which currently operates the Japanese “beef and rice bowl” fast-food chain Yoshinoya, and American ice-cream and restaurant chain Dairy Queen in northern China.

His family also owns the privately- held Harvest Trinity Development, which produces Lion & Globe and Camel cooking oils.

“I am not interested in my family business, and I don’t want to say too much about it,” he said. “It’s not fair to my company and my team if I am always mentioning what my family does. My company is successful today because my team built it from the ground up piece by piece.”

Although Hung is now boss of a thriving tech company, he has not given up his game addiction. When he hires new employees, he expects them to boast about their prowess in World of Warcraft. He also finds time during lunch to play online card games with his staff.

“You can learn a lot from playing video games,” he said. “For example, StarCraft taught me resource allocation, and through Overwatch, I understood the importance of sympathy.”

Hung got the idea of starting his own tech company, thanks to his father’s complaints about his addiction. Hung’s father left an issue of Fortune magazine in his room one Sunday when he was in primary four. In it was a story about Bill Gates.

Since then, the Microsoft founder has become an idol for Hung. Hung majored in computer science at Columbia University in New York. After graduation, he founded two tech companies, Net Strategy and Ascent Technology, which he later sold.

“At university, my classmates were struggling with their programming homework,” he recalled. “Not me. I was having so much fun that even if I lost sleep to finish a project, I enjoyed it. It was as enjoyable as playing video games overnight.”

GoAnimate is Hung’s third start-up. It started as a personal project after he quarreled with his wife. Hung had wanted to make a short animated film to cheer her up, but did not succeed after trying for hours.

“I was very irritated,” he recalled. “All those drawing and animation software were so hard to use. Even someone like me who have read computer science couldn’t manage them.”

That experience prompted him to start a do-it-yourself platform on which users can make their own animated films using pre-produced clip arts. Users can publish their videos after dubbing them with their own audio recordings.

Initially, Hung raised funds in Silicon Valley to finance his third company. In 2011, YouTube invited GoAnimate to join a suite of chosen apps available to individual content creators. GoAnimate broke even a year later.

“Short films have become a sought- after marketing tool. Traditionally, it takes tens of thousands of dollars and at least three months to produce a short film. What we offer can save time and money,” he said.

“Our growth in North America and Europe has been strong over the last 10 years. We kept hiring but still couldn’t catch up with the demand there. That’s why we are less visible in Hong Kong. We didn’t have enough manpower and time to take care of Asia.”

The article first appeared in the Standard on February 24, 2017.


Smart Timing

The watch industry is coming to terms with the fact that the good times are over


It is no secret that the past year has been tough for the Swiss watch industry, with retailers’ woes deepening and large luxury watchmakers issuing profit warnings that signal no immediate relief from the slump.

However, Leo Poon Kam-kee, general manager of TAG Heuer Greater China, sees a silver lining. The three markets which he oversees, Hong Kong, China and Taiwan, have defied the downturn.

“The three markets added up have double digit growth,” he said. “We saw strong growth in China and Taiwan. The growth for Hong Kong, to be frank, was almost flat. Our traditional watch sales went down a little bit, but the Connected smartwatch helped us a lot.”

“Swiss watch exports to Hong Kong dropped by one-third last year. So the fact that our domestic sales managed to remain flat meant we were gaining huge market share.”

TAG Heuer and parent company – the LVMH Moet Hennessy Louis Vuitton group which also owns Hublot and Zenith – have done well in a difficult year.

TAG Heuer’s sales in China have grown more than 10 percent, compared with a decline of more than 10 percent only two years ago. Meanwhile, the watches and jewelry division of LVMH recorded four percent growth in the first nine months.

To put those numbers into perspective, LVMH’s two major competitors – Richemont, which owns Cartier, Piaget, Vacheron Constantin and seven more luxury watch labels, and Swatch, which controls Breguet, Blancpain, Omega and others – fared less well.

Sales of Richemont and Swatch went down by 17 percent and 11.4 percent respectively.

Poon and his boss Jean-Claude Biver, president of the LVMH watch division and chief executive of TAG Heuer, have been instrumental in defying the odds.

Biver is considered a legend as he has bought and revived two dying labels, Blancpain and Hublot, and later sold them at a profit. He was also responsible for putting an Omega on James Bond’s wrist.

Poon and Biver came to know one another when they were working for the Swatch Group a decade ago. They both joined TAG Heuer in 2014, spearheading a strategic revamp to rejuvenate the label.

Biver had the vision that TAG Heuer should woo men under 35. He proposed a new strategy, offering affordable sports watches priced between 1,000 to 3,000 euros to meet their spending power.

Poon’s departure from Tudor, the parent company of Rolex, surprised many as he left two well established watch labels to join one that had failed to excite Chinese shoppers for years. TAG Heuer entered China in 2000.

“It was a new challenge to me,” Poon said. “I knew a lot could have been done with the brand to make it perform better. It was a top label across the world, it should have worked in China. What I needed to do was to correct the mistakes that had previously been made.”

“I was lucky because it was around the same time when top-end luxury brands became affected by the anti-graft campaign in China. Gifting, which used to account for half of the sales, disappeared overnight. So personal use was all there was left.”

In the past year, Poon has been busy drumming up the noise about TAG Heuer. His team held 142 marketing events, including sponsoring the Rugby Sevens and the Formula E, and signing up basketball player Jeremy Lin as brand ambassador.

In China, TAG Heuer has opened 25 new retail locations, and became the first foreign watch brand to partner with the China National Space Administration. It will serve as the timekeeper for China’s expedition to Mars.

But the game changer was the Connected smartwatch launched last December. The HK$11,700 timepiece, modeled after the label’s iconic Carrera mechanical watch, is the only genuine and fully digital smartwatch ever produced by a Swiss watchmaker.

It sold 50,000 pieces last year. And with talk of a big update to be announced at the Baselworld watch fair in March, the brand is hoping to triple its smartwatch sales this year.

“We had hesitations about the smartwatch – whether it would cannibalize the mechanical watch market. Interestingly, we found that 90 percent of the buyers were first time TAG Heuer customers. Thus, we gained new clientele. It surprised us too,” Poon said.

Smartwatches will continue to be a trend to look out for. Another is that consumers will continue to remain price sensitive.

“All brands have come to terms with the reality – it’s a consumer market, not a supplier market anymore,” said Poon. “So you will see more brands bringing their new watches down to a reasonable price level.”

The article first appeared in the Standard on January 13, 2017.

Flying High

Chinese drone maker DJI to enter brick and mortar retail in Asia


Shenzhen-based civilian drone maker DJI is making a major foray into physical retail as it opened its first brick-and-mortar shop in Hong Kong on Saturday. The three-story flagship store in Causeway Bay is the third location in Asia to have opened in recent months.

The 10,000-square-foot shop came on the heels of two similar flagships – in Shenzhen and Seoul – which opened in December and in March respectively.

A company’s spokesperson said that the stores fulfill a purpose more than selling. They are also a technical support center, and a rally point for technology enthusiasts to experience flying a drone.

“Each location was strategically planned,” said Kevin On Chin-hang, DJI’s associate director of communication in Asia Pacific, adding that global market expansion is part of the company’s strategic development plan.

“If you look at Asia, excluding China, which is a big region on its own, the three key markets: Japan, Hong Kong and [South] Korea are definitely on the top of our list. That’s why we are making investments in infrastructures.”

The company will open more physical retail locations, but nothing plan can be confirmed at this stage.

DJI primarily relies on online sales and third-party retailers to reach customers worldwide.

In Hong Kong, phone maker Apple and electronics shops, such as Broadway and Fortress, are some examples of DJI’s local retail partners.

The new shop in Hong Kong carries a full range of products, from gimbals to consumer and industrial drones. The latest products are Osmo Mobile (HK$2,299), a smartphone gimbal released earlier this month, and Phantom 4 (HK$9,299), a drone released in March.

Osmo Mobile is paired with an Android or iOS phone to shoot high quality video footage. The device uses a bluetooth connection, instead of wi-fi, so it frees up bandwidth for live streaming.

Phantom 4 is billed as an “intelligent flying camera.” The quadcopter can shoot 4K video footage, and uses a location tracking algorithm that fuses data provided by object recognition and GPS positioning.

It has two tiny cameras on the front to detect colors, patterns and shapes. The two cameras make functions not available on older Phantom models possible, and ensure a higher degree of safety and ease of use.

“There are three key features that are probably a first in the consumer drone industry,” said On. “When the drone sees an obstacle, it will stop or fly over it. This is a key breakthrough in consumer technology.”

The TapFly feature allows users to direct the drone to fly in a particular direction, while the Active Track feature follows a person or an object based on the images captured by the two tiny cameras.

DJI was founded in 2006 by Frank Wang Tao, a graduate of the Hong Kong University of Science and Technology. The private company is the world’s biggest consumer drone maker by revenue. Market research firm Frost & Sullivan estimates that DJI has a 70 percent market share.

DJI has not disclosed its latest financials. But in an interview with Wang last year, Forbes reported that DJI sold about 400,000 drones in 2014, and was on track to reach a sales target of US$1 billion (HK$7.8 billion). The majority of the units sold were the company’s signature Phantom model.

In May 2015, the company raised a new round of investor funding worth US$75 million. That gave DJI a valuation of US$10 billion. Market analyst ABI Research forecasts shipments of consumer unmanned aerial vehicle to exceed 90 million units, and generate US$4.6 billion in revenue by 2025.

Despite its current leadership position, DJI is facing strong competition in an increasingly fragmented consumer market. Apart from rival French company Parrot, action camera maker GoPro also entered the fray, debuting its first drone in the United States last week.

The article first appeared in the Standard on September 26, 2016.

Digitize to Survive

Retail banks take digital plunge in face of emerging competition from fintech firms


Financial technology, or fintech, is touted as an unprecedented disruptive force in world finance. Facing competition from non-bank tech giants and start-ups, the banking industry is imposing on itself a series of systemic changes, with retail banks at the center.

The urgency for such changes is captured by a recent report – In Tech We Trust – by the Economist Intelligence Unit. It surveyed 203 senior retail banking executives around the globe.

One standout finding is that retail bankers are far more concerned about the threat of digital disruption posed by non- traditional competitors than the tighter regulations brought along after the global financial crisis in the last decade. They believe the traditional branch- based banking model is dying, and retail banking will become fully automated.

In Hong Kong, traditional banks are hastening the digitization of its outlets, changing their role from a cash- handling point into one that provides digitized financial services. Banks with a digital branch are Standard Chartered and the Bank of East Asia.

The latter has a target to convert all 89 Hong Kong branches into digital outlets by 2018. The digitization effort provides a fully paperless, straight- through banking experience. It is said to be “a new way to bank,” according to the SAR-based lender.

“Consumers still highly value a physical branch when picking their primary bank, but the role of a branch has changed,” said Kenneth Tsin Wai-lun, BEA’s personal banking division’s head of channel management and operations department.

“Nowadays, 90 percent of our customers’ transactions are done through internet or mobile. That explains the switch to an omnichannel strategy, which we target to offer a consistent service in all channels, including mobile, internet, branch, call center, and social media.”

BEA’s digital branch is equipped with a suite of banking devices and interactive software, developed entirely by the bank’s in-house IT team. Traditional branch services, from account opening to the selling of structured products, can now be done with a tap of the finger.

A tool called i-Kit, an iPad-like device, can close a credit card application in five minutes. One only needs to take snapshots of the required supporting documents with the device, leaving the optical character recognition technology to auto-complete an application form.

Then there is i-Teller, which does what a bank teller does, but via a live video chat and touchscreen interface. Bank staff at a remote location handle inquiries and requests about money transfer or basic investment products, such as time deposits and the Mandatory Provident Fund.

Another device worth noting is i-Window. Bank staff use the interactive aid to sell complicated financial planning products, such as insurance and mortgages. The device is so innovative that no one else is providing similar solutions, according to BEA.

“The device guides our staff and customers through a transaction process, in which their conversations and all images shown on screen are recorded. The staff still handle the due diligence work, but pre-recorded tapes now do part of the explanations,” Tsin said.

“Skipping any one step to go to the next is not allowed, and customers can see what an employee is doing on a second screen. This is a big assurance, as it ensures our staff are following all regulatory requirements and protecting customers’ interests.”

Consumers and the banking industry welcomed BEA’s automation effort. Business-wise, the digital branches have yielded a 35 percent increase in deposit balance per customer, and a 65 percent rise in average mortgage drawdown compared with its traditional branches.

The bank has also won various accolades, including Best FinTech Grand Award at the Hong Kong ICT Awards, and the Most Innovative Bank of the Year Award at the BAI-Infosys Finacle Global Banking Innovation Awards in Las Vegas.

For traditional banks saddled with rising regulatory costs, digitization is a survival strategy that yields a cheap and fast growth model. But they’re up against tough competition from fintech companies.

These tech companies aren’t banks, despite making money off digital platforms for financial services – from fund management to credit card processing, peer-to-peer lending, and crowdfunding.

In essence, they offer the same financial services as a traditional bank, with the same degree of efficiency and ease of use. But with the promise of lower fees, they’re starting to divert the flow of money to the traditional bank networks.

To Hong Kong-based retail banks, two most fearful challengers are the Alibaba-backed MyBank, and Tencent- backed WeBank, which have already built a large local customer base.

According to Ernst & Young’s Fintech adoption index, one in four people in the SAR used at least two fintech products by non-bank, non- insurance, online companies over a five- week period last year. The index drew upon a survey of 10,131 digitally active consumers in Australia, Canada, Hong Kong, Singapore, Britain and the United States.

Hong Kong has the highest non- bank fintech adoption rate of all markets surveyed – more than 10 percentage points higher than America and Britain, which are both pioneer fintech hubs.

What products are most popular in Hong Kong? Online services for payment, foreign exchange and overseas remittances come first. Savings and investment products are second. They include online stock broking and spread betting, online budgeting and planning, equity and rewards crowdfunding, and peer-to-peer or marketplace lending.

“We are going to see Ant Financial [Alibaba’s affiliate that launched MyBank] and other large China fintech players in the next 12 or 18 months to go international very aggressively. Southeast Asia and India are obvious candidates,” said James Lloyd, Ernst & Young’s Asia-Pacific fintech leader.

“Over time, the question will be how do some of the incumbent banks respond. We are likely to see more partnerships with some of the retail banks with smaller fintech. It’s going to be very interesting.”

The article first appeared in the Standard on July 25, 2016.