Hong Kong: What are some “broken” regulations in Hong Kong that suffocate innovation in financial technology?
To answer this question, we have to figure out whether innovation in financial technology has suffocated and if “broken” regulations in Hong Kong has caused that suffocation.
It’s pretty safe to say e-commerce or any advancement in Fin Tech in Hong Kong is dead. That is because Hong Kong prudence attitude towards finance. To innovate and encourage innovations means more work, and no on on earth wants more work unless he is a nut or have vested interest. Most bureaucrat who are in-charge of finance in Hong Kong have no idea how internet works and what are the implications. They do not believe its worth the time to change the system to cater to these technological advancements. This I believe is a form of myopia based on what has happened in their up bringing, from rag to riches because of labor intensive low tech venture instead of high tech ones.
However, to put the blame entirely on regulators and bureaucrats are unwise. Its never the regulations that is suffocating innovation in Hong Kong or anywhere in the world. If there’s money, people will do it. Government regulates prostitutes and drugs with a handful or ordinances, yet it flourishes in Hong Kong with flying colors.
The biggest hurdle towards innovations in Hong Kong is because of what I call the Chinese mentality.
Due to the early development of internet in Hong Kong. Locals can easily equate (Internet= paradise of scam artist=not trust worthy).
On top of that, locals Chinese like myself are infamous for creating scams, so level of trust in Hong Kong is fairly low.
When we are in business and we do not know the party very well, we perform top level “due diligence”, even for a few dollars of purchase. They do not mind 2-3 hours of travel to save a few penny. Time is not a precious rarity in the mentality of local. The most important thing is not to be taken advantage of, even with a high opportunity cost. When there’s a choice between phone and online. Phone is preferred. When there’s a choice between phone and brick, brick over phone any day.
As you can see there are a lot of automatic ordering machines, no local Chinese will use it when given a choice.
Locals will discuss whether a shop is pricey or not and discuss for days before making a purchase, the more they discuss, the less impulses there are as usual. And if they do want to make the purchase, hey hong kong is a small place, why dont i just walk down the street and use this price online to bargain with the shop owner instead of shopping online.
As you can see this is a vicious cycle, with little people preferring technology, no one will be interested in investing in anything. That means poor technology and even less willingness to use it. Most websites in Hong Kong are not updated in ages. Even if they are functional, people will assume its out of date, guess what will they do? They will find a phone number and call it until its off the hook.
“As a side note, you can read my blog “Chinese Obsession with Fixed Line Phones”
Hong Kong is the low tech capital of the world, to deter any complains, governmental organizations encourage people to use facsimile, since facsimile cost money, no one will complain and its another easy day for bureaucrats. And lets not forget, if you hang up the phone by “accident”, no facsimile will be received and everyone will be happily ever after.
However, if one is brave enough, its very profitable to turn high tech proposition like online testings, online material and turn it into profitable offline products in Hong Kong.