Opening Remarks by Mr. Victor Lam, JP, Acting Government Chief Information Officer, at the “Cyber Security and Fintech Conference 2017”

Enoch (Lee), Anna (Lin), distinguished guests, ladies and gentlemen,

Good morning! I have great pleasure in joining you all today at the Cyber Security and Fintech Conference 2017. First and foremost, I would like to thank BSI Hong Kong and GS1 Hong Kong for organising this event, which just comes in the right time as the two correlated topics - cyber security and FinTech - are much discussed among the innovation and technology sector and financial services players.

According to a recent report on global FinTech, 45% of financial institutions among 71 countries under survey are currently engaged in partnership with FinTech companies, and 82% of them will increase such partnership in the next three to five years. Over 70% of them expect to adopt Blockchain as part of a production system or process by 2020. This is a clear indication of the growing influence of FinTech on a worldwide basis.

In Hong Kong, the financial services industry is an important pillar of our economy, contributing to 18% of our GDP and employing over 250 000 people. Riding on new technologies, more accessible financial services and innovative solutions could be developed with enhanced customer experience and lower costs. FinTech is definitely a game-changer transforming the financial services industry.

Indeed, FinTech integrates financial services and technology, and Hong Kong has all along been doing well on both aspects. Hong Kong is a major international financial centre with a large number of global banking institutions. At the same time, we have a highly developed ICT sector with a valuable pool of innovative talents. We also have a world-class ICT infrastructure that connects Hong Kong with the rest of the world through a network of highly efficient submarine and overland communications lines.

Riding on these advantages, the HKSAR Government is committed to encouraging the relevant industries and collaborating with them to develop Hong Kong into a FinTech hub. Accordingly, the Government has put in place a basket of supportive measures to foster the local FinTech development. For example, Cyberport, our ICT hub, has rolled out diversified entrepreneurial support to FinTech startups. It has dedicated a total area of over 47 000 square feet Smart-Space for FinTech startups and commenced a designated incubation programme last year to support 150 Fintech startups in five years. Since 2015, Cyberport has sponsored university students to join FinTech training camps in overseas universities to broaden their horizons and equip them with insights into the global market.

To complement the efforts in FinTech development, the OGCIO has created the “Best FinTech Award” category under the Hong Kong ICT Awards since 2016 to recognise FinTech talents. We also presented, in collaboration with Cyberport, a FinTech Forum in the Internet Economy Summit in April this year to explore the latest trends of the disruptive technology.

With the concerted efforts of various stakeholders especially the industry players, the local FinTech ecology is making good strides. The number of FinTech-related startups increased from 86 in mid-2015 to 138 last November. Hong Kong also attracted US$400 million worth of venture capital investment in FinTech companies during 2014 to 2016. Although the investment value is lower than that of the two huge markets of Mainland China and India, it is already ahead of our regional peers such as Australia, Japan and Singapore.

Nowadays, cyber security is a key factor for any technological initiative to thrive, and there is no exception for FinTech. While FinTech users treasure novel and user-friendly applications, cyber security is of equal importance in building up and ensuring trust among participants.

In this connection, the Hong Kong Monetary Authority (HKMA) launched the “Cybersecurity Fortification Initiative” last December to further enhance the cyber resilience of the banking sector in Hong Kong. Under this initiative, the Cyber Resilience Assessment Framework, Professional Development Programme and Cyber Intelligence Sharing Platform were developed and enforced to ensure the secure operation of financial organisations.

Our mobile penetration is among the highest in the world, in which a person carries more than two devices on average. Mobile devices are widely used in our daily life. With their convenience, ease of use and high portability, mobile devices provide an excellent platform for FinTech applications. At the same time, mobile access will also come with security threats as users may connect their devices to public Wi-Fi networks or use apps from susceptible sources unintentionally. It is thus important to make the public aware of such risks and the need to protect their mobile devices from security threats, such as leakage of personal or other sensitive information.

To promote public awareness on cyber security, the OGCIO has set up one-stop portals providing relevant information and updated resources on cyber security, including the InfoSec (www.infosec.gov.hk) and Cyber Security Information Portal (www.cybersecurity.hk). Apart from various updated information and resources on cyber security, these websites provide guidelines and tools for the public to conduct health checks on computers, mobile devices and websites.

Cyber attacks are relentless. They have become borderless, more organised and coordinated. Examples of recent major cyber security incidents include ransomware of WannaCry and PetrWrap, resulting in infection of hundreds of thousands of devices around the world and massive financial losses.

We need collaborative efforts to fight against growing cyber threats. Internally, the OGCIO regularly reviews the relevant security requirements within the Government to address different types of information security threats and cyber attacks. In response to outbreaks of major security incidents, we take immediate actions to assist government departments in taking effective and prompt measures to prevent and reduce the risks and impacts on their computer systems. We also work closely with the Hong Kong Computer Emergency Response Team Coordination Centre (HKCERT) and the Hong Kong Police Force, and maintain close ties with both local and overseas security organisations to improve our overall capabilities in intelligence collection and information exchange.

As mentioned in the Budget Speech earlier this year, distributed ledger technology, including Blockchain, and cyber security would be two major development clusters in FinTech. The Government will continue to encourage the sector to develop and apply FinTech which has immense potential, and promote Hong Kong as a hub for the application and setting of standards for these technologies.

Today we have a packed programme on hot topics of cyber security and FinTech. Our expert speakers will certainly bring us a full day of inspiring sharing and insightful ideas. I wish you all a very fruitful and enjoyable day. Thank you!

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