Q&A- Investors / Corporates

7 Questions with Thorsten Terweiden, Invest Hong Kong (InvestHK)

1. Tell us a bit about yourself and your company.

I am the Deputy Head of Fintech at Invest Hong Kong (InvestHK) www.InvestHK.gov.hk and lead on Fintech across Europe out of our UK Office in London.  InvestHK is the Hong Kong Government department that promotes the many advantages of Hong Kong as a base to locate a business; and assists overseas enterprises establish and develop their presence in the city. InvestHK has 30 offices around the world, with its head office in Hong Kong.

I enjoy the prospect of engaging with new FinTech connections from Germany. I previously worked for more than ten years in export and investment promotion on behalf of the German Ministry of Economy and before that for the Swiss government.  I assisted several hundred exporting SMEs with their market entry in the UK and also helped attract investment into Switzerland. In my current role I enjoy assisting European Fintech companies with establishing business operations in Hong Kong.


2. What products or services do you offer, and to whom?

InvestHK provides a confidential and complimentary facilitation service to overseas companies including startups that intend to establish operations in Asia by choosing Hong Kong as a business location.  The services range from help with company formation, to providing networking opportunities, to business introductions, information on funding schemes and connections to major Hong Kong innovation centres.

For instance, in 2017 and 2018 InvestHK worked closely with The Floor Hub from Tel Aviv in Israel to assist the launch of its first Fintech Innovation centre in Hong Kong. Hong Kong’s location and connections to the Asia-Pacific Region make it an obvious base for FinTech companies and The Floor has already benefited from being part of a thriving and growing Fintech ecosystem.


3. What are your focus or interest areas, overall and within FinTech?

The constant evolution of FinTech has created new sectors that have become more recognisable in the B2B space. As a result, InvestHK welcomes and is focusing on verticals such as: Cyber security, Blockchain, Regtech, Insurtech, Wealthtech and Creditech.

In Europe we have seen a lot of interest in Hong Kong not from British and German Fintech companies, but also Scandinavian ones.


4. What opportunities or challenges are FinTechs creating for incumbents / others?

Fintech provides a foundation for financial services innovation and transformation, yet fintech firms still have to overcome barriers to this cultural shift in business, as well as regulation and compliance.  In fact, fintech companies are actively trying to fill a gap in the market created by the difficulties traditional banks sometimes have working with local SMEs. They are steadily working on educating the businesses about their true potential in more underserved markets.


5. What do you think of the incumbents’ response, and what should they do differently?

Fintech companies and traditional banks should follow a collaborative approach and not necessarily be purely competitive. A mix of fintech and long-term experience from established financial services elevate the overall value of the financial services segment.

Fintechs and Banks are cooperating in Hong Kong, the city has at least five Fintech focused accelerators. For example one such accelerator, Supercharger, has Allianz as its main partner. By working through collaboration, traditional industries and Fintech companies are capable of bringing about the next wave of change and tech solutions.

The Fintech Supervisory Sandbox (FSS), launched by the Hong Kong Monetary Authority (HKMA) www.hkma.gov.hk in September 2016, allows banks and their partnering tech firms to conduct pilot trials of their fintech initiatives involving a limited number of participating customers, without the need to achieve full compliance with the HKMA’s supervisory requirements. As of the end of June, 33 new technology products have been tested in the FSS. Out of these cases, 25 pilot trials have been completed, and the products have subsequently been rolled out. Separately, banks have collaborated with tech firms in 18 trial cases.


6. Which way do you see the financial services sector going? Who would be the likely winners?

Hong Kong is the world’s third largest financial centre, it is an important regional financial hub; large international banks are expanding their presence here as they look to capture the Mainland China market, while insurers are also growing their base in the city. The Financial Services sector in Hong Kong is beginning to embrace the exciting new opportunities and changes that new technologies are bringing.

There is a big buzz around Smart Banking in Hong Kong at the moment. In fact the HKMA announced a new era of Smart Banking in Hong Kong in March last year. This includes the introduction of a Virtual Bank licence as well as the launch of a Faster Payments System (FPS) for example. Over 50 Hong Kong Fintech players have lined up to acquire a Virtual Bank licence.

Likely winners will be those incumbents that fully embrace the opportunities of digital transformation. Leveraging advanced technologies can not only to strengthen customer engagement with personalized and innovative offerings, but also deliver business-wide process improvements as well.


7. What’s on your bookshelf / holiday reading list?

I enjoy keeping up to date with the latest news and updates in the Fintech scene so you often will find me reading Finews Asia or Finextra. Otherwise, I am a great fan of podcasts, in which case I like to listen to 11:FS’ podcasts which I find are always highly interesting.

During my upcoming summer holiday I will read ‘Ein Mensch faellt aus Deutschland’ (A human being is falling out of Germany’) by Jewish exile Konrad Merz.