Ahead of the AI & Big Data Hong Kong Leaders Summit 2019, we have an interview with Syed Musheer Ahmed, General Manager of Fintech Association of Hong Kong. Syed is a Financial Services professional with cross-functional, multi-asset, international experience in financial markets and strategy consulting having a strong understanding of financial technology and digital innovation.
What does make you excited most about Fintech?
The technology underpinning financial services has been around for many decades, but the coining of the term, “Fintech” is more recent. The most exciting thing about Fintech is the real impact it is having across the business, from front office functions to middle and back office. It is no longer just a function for operations, but a real revenue driver. In addition, with the evolution of smartphone and mobile technology adoption, fintech plays a vital role for financial inclusion globally.
Are there any particular things about the Hong Kong Fintech ecosystem that you would like to share?
The Fintech ecosystem in Hong Kong has grown from 150 startups 5 years ago to over 700 now. With Hong Kong being world’s third-biggest financial center and biggest in Asia, it provides B2B & B2B2C fintech startups with a great platform to build their business with over 75 of top 100 banks & insurers based here for their APAC business HQ. In addition, Hong Kong now is a platform for mainland Chinese firms to launch their global operations with HK as the base.
The regulators have been quite active and brought in many fintech related regulations and policies including on Smart banking, Virtual banks, Open APIs, Sandboxes, Faster Payments, Virtual Insurers, as well as regulations on the Crypto industry. Organisations like FTAHK, Cyberport, HK Science park and Invest HK work closely to help support and build the overall ecosystem.
How might the world look like when blockchain is fully in development?
When Blockchain is mature and deployed internationally on scale, we will see a lot of transparency, better sharing and management of data, increased connectivity and a big increase in operational efficiency and reduction in duplication of work.
A few years ago, cryptocurrency remained strange to a lot of people. Are customers more familiar knowledgeable with cryptocurrencies in 2019?
To the man on the street, Crypto is still not a familiar asset. Bitcoin is probably the one that most people know of. Having said that, most people in financial services understand crypto decently now. Eventually, most people on the street will get to better understand cryptocurrencies as they evolve into Digital Assets and we see increased tokenisation of assets across asset classes.
How to decide whether a client needs a financial human-advisor or a robo-advisor? What are the pros and cons of using a robo-advisor? How do you think robo-advisor can be implemented in the future?
With the development and maturity of robo-advisors, they are playing an increasing role in the investment and wealth management space. The choice of whether a client needs a robo-advisor or financial human advisor is not as simple as if looks. One needs to consider the nature of investment products, level of complexity of the product, level of comfort and digital savviness of client, and size of investments before deciding whether a client needs a robo-advisor vs a financial human advisor.
For lower value, vanilla investments, a robo advisor can probably suffice. However, as the complexity & value increases, people still prefer the service of a human advisor. The industry aa a whole is probably heading towards a hybrid model, where clients & advisors both use digital tools to help the client make decisions, while client executes low value transactions themselves. In addition, most of the older millennials are probably quite comfortable handling most of their transactions themselves via a robo advisor or digital solutions of some sort.
Robo advisory is still in a development phase, and we have only a few cases of a robo-advisor being able to achieve scale globally. Robo advisors form a good foundation for investment advice and in particular for the middle class and mass affluent to get access to tools which they did not have previously.
The success of robo-advisory has mainly been in the B2B world and in helping augment a human advisor. For robo-advisory to become mainstream, we will need both better Algos as well as use of mature AI models for these investment decisions.
Syed Musheer Ahmed is the upcoming speaker at AI & Big Data Leaders Summit Hong Kong 2019. To find out more about the event, please click here.