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In recent times the talented have made their exit among swathes of other Hong Kongers, but signs of a reversal are solidifying. Bill Lumley reports.

A return of fintech talent to Hong Kong may be on the cards as the government offers incentives to staunch the steady flow of residents from the city. The exodus over the past 18 months has been widely attributed to harsh restrictions relating to the Covid-19 pandemic, which has claimed almost 10,000 lives in the city, conferring it with the highest rate of death from the virus globally.

Over the past month, reports from south-east Asia have suggested the Hong Kong government is now taking active steps to encourage skilled workers to move to the city, in the form of financial incentives and a relaxation of immigration rules. Financial services and treasury minister Christopher Hui Ching-yu has said the planned initiatives include up to HK$10m ($1.3m) in cash subsidies for select fintech operations, and that the government plans to ease immigration rules for qualified individuals.

Vanishing act

In January, the Hong Kong Association of Banks said the city’s zero-Covid rules were having a severe impact on the availability of skilled personnel and needed to be addressed urgently. In February alone, nearly 1% of the entire Hong Kong population of 7.5 million are reported to have left the city, and data from Hong Kong’s Census and Statistics Department reveals that the city’s population fell from 7.41 million to 7.29 million between mid-2021 and mid-2022.

HSBC’s latest Expat Explorer Survey revealed expats now rank Hong Kong only 40th out of 46 locations worldwide, just above the Philippines and Russia, while south-east Asian rival Singapore makes it into the top 10 in overall habitability.

According to a survey by global recruiter Manpower for the fourth quarter of 2022, talent shortages in Hong Kong reached a 16-year high in 2022, with 85% of banking and finance operations reporting a shortage of highly skilled staff. And a recent survey conducted by Google revealed that 64% of fintechs in Hong Kong were facing a “severe talent gap”, with 80% of respondents saying they would welcome more supportive policies from the government.

Though the Hong Kong government’s offer of financial assistance is yet to be clarified, and an easing of Covid restrictions is unlikely to occur before November, reports are emerging that suggest the exodus of highly paid banking staff is lessening. Former residents are said to be returning because they find the alternatives unsuitable – London, for example, is cited as being too expensive, and Singapore as less in keeping with their lifestyle.

Down but not out

King Leung, head of fintech at InvestHK, a government department which supports the Hong Kong fintech ecosystem, says the city always welcomes talent “with open arms”. He says there are numerous talent-related policies, incentives and admission schemes now available, including more recent schemes with a higher emphasis on talent in fintech and ESG that are in line with the city’s economic development priorities.

Despite the figures showing swathes of residents leaving Hong Kong, Mr Leung says the latest results of InvestHK’s annual surveys from 2021 show that in fact the number of business operations in Hong Kong with parent companies overseas or in mainland China rose to 9049. Additionally, the number of start-ups reached 3755 – both record highs. This indicates, says Mr Leung, that Hong Kong remains an attractive place for companies to set up or expand their businesses.

The city has one of the most vibrant fintech ecosystems in Asia and is an international gateway to the Guangdong-Hong Kong-Macao Greater Bay Area, explains Mr Leung. “For fintech talent and start-ups with the ambition to scale up, Hong Kong serves as an enormously attractive springboard. Against this backdrop, the massive opportunities continue to attract talent and the healthy ecosystem continues to help businesses thrive.”

Other challenges

Another difficulty facing the Hong Kong fintech sector relates to ageing bank systems. Craig Bennett, Asia-Pacific managing director for Temenos, a banking software provider, says maintaining legacy systems is expensive and the skills are in short supply, so resource challenges in Hong Kong simply add to the urgency for banks in the region to move to modern technology platforms. “We continue to invest in our local presence to meet the growing demand and welcome government initiatives to make Hong Kong an attractive market for international talent,” he says.

And despite signs of a revival in levels of talented personnel, Hong Kong needs to stay alert to competition in the region. This month, a report by KPMG and digital investment adviser Endowus showed Singapore has growing ambitions in fintech, with wealth management technology funding growing seven-fold in the past five years. 

To combat its raft of problems and to regain its throne, the Hong Kong fintech sector has its hopes pinned, for now, on the authorities easing their so-called dynamic zero-Covid strategy.


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