Hong Kong FinTech Buzz Index rebounds from a decline in 2021Q4

The HKU FinTech Index Series Project has published the 2021Q4 Hong Kong FinTech Buzz Index (FBI) to gauge local FinTech companies’ outlook and the general sentiment on the sector as reported by the local press.

Hong Kong FinTech Buzz Index – 2021Q4
Having analysed 1,141 news articles posted between October and December 2021, the Hong Kong FBI for the third quarter (Q4) of 2021 is computed to be 99.7, showing a rise of 4.6 index points (or 4.8%) from 95.1 in the third quarter in 2021 (2021Q3).

Table 1. Result of FBI

Period InsurTech WealthTech & CreditTech Blockchain & Cryptocurrency Payment & Digital Banking RegTech & Cybersecurity Supporters & Others
Q1, 2019 104.8 104.9 104.0 105.0 91.5 106.1
Q2, 2019 106.0 107.7 108.7 105.4 73.2 109.6
Q3, 2019 99.2 104.6 105.3 109.3 90.9 106.5
Q4, 2019 98.9 100.8 103.7 106.4 79.9 104.1
Q1, 2020 101.5 101.1 102.6 104.0 94.1 101.9
Q2, 2020 104.2 103.1 99.1 102.9 98.6 100.6
Q3, 2020 100.8 107.4 67.9 102.7 80.7 105.4
Q4, 2020 101.4 108.9 100.1 103.5 98.9 106.9
Q1, 2021 106.0 106.2 91.1 103.3 111.6 108.7
Q2, 2021 100.9 98.3 89.1 100.6 99.5 105.1
Q3, 2021 100.2 100.4 78.9 95.7 91.1 106.8
Q4, 2021 104.9 107.4 85.1 98.0 92.8 109.0

An increase was recorded in all six sectorial indices. Among the six of them, the sectorial index of Blockchain & Cryptocurrency experienced the largest rise, which could be attributed to the promotion of the eTradeConnect platform and the growing popularity of Non-Fungible Tokens (NFT). The eTradeConnect platform together with the Cross-Boundary Wealth Management Connect Scheme also contributed to the substantial increase in the sectorial index of WealthTech & CreditTech. The rise seen in the sectorial indices of InsurTech and Payment & Digital Banking was respectively due to the introduction of virtual insurers and widening application of digital payment platforms. The RegTech & Cybersecurity sectorial index has slightly increased, which was because of the drop in the number of online scams relative to the previous quarter. The Supporters & Others sectorial index has also slightly risen, as positive expectations concerning the development of the Greater Bay Area were identified in the news articles.

Top Words in 2021
Keywords that appear the most have been extracted from up to 5,000 news articles over the entire year. In 2021, the top words included “Consumption” (消費), “Digital payment” (電子支付), “Greater Bay Area” (大灣區) and “Cross-border” (跨境). In 2020, the top words included “Platform” (平台) and “Pandemic” (疫情) in addition to “Digital payment” (電子支付). This indicates that digital payment has continued to be the focus of FinTech development, and in 2021 such development has largely been driven by motivations to boost consumption.

About the HKU FinTech Index Series Project
The HKU FinTech Index Series Project introduces the Hong Kong FinTech Growth Index (FGI) and the Hong Kong FinTech Buzz Index (FBI) to gauge local FinTech companies’ outlook on the industry and the general sentiment on the sector as reported by local press. It is the first in the region to provide index indicators on the development of the sector, with an aim to provide information in a timely manner to track the growth and development of the financial technology industry in Hong Kong.

FGI is a yearly index with four sub-indices on Business Environment, Business Performance, Investment on R&D and Demand for Talent. It is a forecast of the Hong Kong FinTech sector’s market situation in the coming year and an assessment of the situation in the current year. FBI is a quarterly index representing a quantified sentiment of the local FinTech-related news articles in Chinese in the past three months. The index has a base value of 100 points which represents the sentiment of nearly 10K FinTech related news articles in major local news media outlets in 2016 and 2017. FBI is further broken down into six sectors: Insurance Technology (InsurTech), Wealth Management and Credit Technology (WealthTech & CreditTech), Blockchain & Cryptocurrency, E-Payment & Digital Banking, Regulatory Technology (RegTech) & Cybersecurity and other related business including AI and big data.

The project is led by Prof. S.M. Yiu, Professor, Department of Computer Science, HKU, and Prof. Philip Yu, Honorary Professor, Department of Computer Science, HKU; Head & Professor, Department of Mathematics and Information Technology, EdUHK, and funded by The University of Hong Kong – Standard Chartered Hong Kong 150th Anniversary Community Foundation FinTech Academy.

To provide professional insight, the Advisory Board is established, comprising professionals from the University of Hong Kong and the local FinTech industry, including representatives from FinTech Association of Hong Kong, InvestHK, Cyberport, Hong Kong Science and Technology Parks Corporation, and The Bank of East Asia, Limited. The members provide expert advice on the FinTech companies to be included in the master list for the annual survey to return the FinTech Growth Index. They also advise the Project on index methodology.

For further information on the HKU FinTech Index Series Project, please visit the project’s website at www.fintechindex.hku.hk.

About The University of Hong Kong – Standard Chartered Hong Kong 150th Anniversary Community Foundation FinTech Academy
The University of Hong Kong – Standard Chartered Hong Kong 150th Anniversary Community Foundation FinTech Academy (“the HKU-SCF FinTech Academy”) was established in April 2020 with a mission to make a sustainable impact in FinTech by grooming world-class talents and leading innovative research to further strengthen Hong Kong’s position as an international financial centre.

Through a commitment of HK$60 million from the Standard Chartered Hong Kong 150th Anniversary Community Foundation, the HKU-SCF FinTech Academy is steered by the Faculty of Engineering, with support from the Faculty of Law as well as the Faculty of Business & Economics of The University of Hong Kong.

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