Hong Kong as an IFC

Despite the global macroeconomic uncertainties that have characterised recent years, Hong Kong’s core advantages remain unchanged. As growth in Asia continues to outpace much of the world, demand for sophisticated financial services will remain strong, with Hong Kong well-placed to serve as the region’s financial gateway.

Hong Kong’s reputation as a leading international financial centre rests on widely recognised fundamentals. Our location at the heart of Asia and excellent connectivity are as important as ever, while our low and simple tax rate remains globally competitive. The city boasts a superb professional services ecosystem with world-class talent including lawyers, advisors and accountants. All of these are underpinned by the strong foundation of the rule of law, with the benefits of a common law system, independent judiciary, clean transparency index and trust in the core system.

Crucially, our connections with the Chinese Mainland cannot be replicated by any other city. As the global trade and business landscape evolves, Hong Kong will continue to provide essential services as a bridge between the Mainland and the rest of the world. This involves helping Chinese companies seeking growth in new markets including Southeast Asia, the Middle East and Central Asia, as well as supporting international corporates keen to explore emerging onshore opportunities.

Looking ahead, Hong Kong will continue to innovate in areas where it already excels. The government has demonstrated strong commitment to positioning the city as a global hub for virtual assets with coordinated regulatory, government, and private sector partnerships.

Hong Kong’s regulatory framework for virtual assets now stands out as one of the most sophisticated and forward-looking in the region. The city has also made rapid progress in developing a clear licensing regime for stablecoin issuers. Earlier this year, the city officially enacted legislation that will take affect later this year, requiring stablecoin issuers to be licensed, making Hong Kong one of the first jurisdictions in the world to establish a statutory regulatory framework for stablecoins.

Central Bank Digital Currencies (CBDCs) are another frontier where Hong Kong is making tangible progress. This year, the eHKD pilot has taken concrete steps towards implementation, while the ongoing digital RMB pilots have deepened cross-border connectivity with the Chinese Mainland.

The development of the Commercial Data Interchange (CDI) has also been a major step forward. The CDI is now widely used across the banking sector, enabling secure, consent-based data sharing that is bringing real benefits to both financial institutions and their customers, particularly SMEs seeking access to credit.

As Hong Kong continues to build on its advantages, attracting, retaining and nurturing talent will be important. The city is currently drawing highly skilled professionals from the Chinese Mainland and internationally. However ongoing challenges—particularly the high cost of living—remain front of mind for both employers and employees.

With talent markets more fluid than ever and competition from other centres such as Singapore remaining strong, the challenge is not just to bring professionals in, but to create an environment where they want to stay and build their careers.

A particularly pressing concern is the availability of skilled talent in AI and data science. The HKMA’s 2024 Talent Development Survey showed that Hong Kong’s banking sector faces a shortfall of at least 2,800 AI and data science professionals, with 78% of banks citing difficulties in attracting or retaining qualified tech talent. This challenge is compounded by rising competition from other regional financial centres.

Towards the end of last year, KPMG, in collaboration with the HKMA and Quinlan & Associates, published a report on Gen AI that underscored similar hurdles. Key findings included limited numbers of seasoned AI professionals, the challenge of integrating new AI talent into established teams, and concerns that compliance and risk management frameworks may struggle to keep pace with accelerated AI adoption¹.

Hong Kong’s response to these challenges has been proactive. Over 70% of banks have launched internal upskilling programmes in the past year, focusing on AI, data analytics, and digital risk management². In addition, more than 1,500 international fintech professionals were admitted to Hong Kong under the city’s Top Talent Pass Scheme in 2024, reflecting ongoing efforts to globalise the talent pool.

More broadly, the HKMA recognises the importance of a clear roadmap for manpower planning and is currently conducting a study on potential talent gaps in the banking sector over the next five years. However, it is crucial that banks themselves also take the lead in building a robust pipeline of professionals equipped to manage both the risks and opportunities of digital transformation. This should include investing in upskilling existing staff and embedding AI literacy into leadership development.

As we look ahead, it is clear that the pace of technological change will only accelerate. Banks in Hong Kong may not be able to anticipate every disruptive trend, but by investing in their workforce, prioritising upskilling, and engaging with the HKMA’s fintech promotional work, they can create the conditions for longterm resilience and growth.

[1] Annex_Generative Artificial Intelligence Sandbox
https://brdr.hkma.gov.hk/eng/doc-ldg/docId/getPdf/20241118-4-EN/20241118-4-EN.pdf

[2] hkma.gov.hk/media/eng/publication-and-research/annual-report/2024/AR2024_E.pdf
https://www.hkma.gov.hk/media/eng/publication-and-research/annual-report/2024/AR2024_E.pdf