Bulletin November 2018 (Vol. 20 No. 1)

Technology is transforming finance. HKU is at the forefront in explaining financial technology, identifying its impacts and using that knowledge to help others understand this deepening trend. The FinTech Revolution banks and bank regulators from more than 100 developing countries; and launched Asia’s first FinTech MOOC (massive open online course), as well as undergraduate and Master’s programmes in FinTech. “FinTech is rapidly changing the finance industry and this is of critical importance to Hong Kong given the size of the financial sector here,” Professor Arner said. “We believe there is tremendous scope to re-conceptualise global finance and its regulation in line with technological change and we have been working with industry, policymakers and regulators to move this forward.” The starting point When the scholars started working on their groundbreaking paper only three years ago, there were few others in their field looking at FinTech. Mr Barberis had just started his PhD under Professor Arner’s supervision, having worked on building a new online bank in the United Kingdom. As they discussed this emerging market activity, they saw an What is FinTech? The first thing to understand is that despite the 21 st -century label, financial technology (as FinTech is properly known) is not new. It has been in use for more than 2,000 years, starting with coins then paper and credit cards and, more recently, cryptocurrencies such as Bitcoin. This understanding is the starting point of a 2015 study by HKU scholars that became the most downloaded paper on FinTech on the Social Science Research Network (SSRN) and has been frequently cited by scholars and policymakers around the world. “Our contribution has been to show not so much what FinTech is but who is using it. One hundred years ago it was used by governments. Seventy years ago, banks like Citibank and JP Morgan started to create innovations like credit cards and ATM machines. In the last 10 years, innovation in technology is being done more by start-ups than financial institutions,” said Janos Barberis, a PhD candidate in law who co-authored the paper, titled ‘The Evolution of FinTech: A New Post-Crisis Paradigm?’, with Professor Douglas Arner, Kerry Holdings Professor in Law, in the Faculty of Law and Professor Ross Buckley of the University of New South Wales, published in the Georgetown Journal of International Law . Moreover, the rapidity of recent developments is new and it is having repercussions that reveal themselves practically in real time. New players are entering the finance industry, not only start-ups but also technology companies, such as Alibaba, Tencent and Amazon. Many new users are gaining access to financial services for the first time, including 1.2 billion users just since 2011. New technology is also changing the nature of finance, in particular blockchain which, among other things, has spawned cryptocurrencies. Regulators are trying to catch up with all these trends, which is where the HKU scholars come in. Following their initial paper, they have produced or are in the midst of completing research on RegTech (regulatory technology), TechFin (technology companies in the finance industry) and other trends in the field; launched a start-up; produced policy papers for the Alliance for Financial Inclusion (AFI) made up of central FinTech is rapidly changing the finance industry and this is of critical importance to Hong Kong given the size of the financial sector here. Professor Douglas Arner Professor Douglas Arner spoke at the Pan Asian Regulatory Summit in October, 2018. (Courtesy of Refinitiv) 03 | 04 The University of Hong Kong Bulletin | November 2018 Cover Story