U.S.-China Synergy in Fintech?
Financial technology, or FinTech, is producing great potentials for businesses around the world, including in Atlanta. On August 14, a panel conference “FinTech Power House: Where Atlanta and China’s Greater Bay Area Meet,” took place at the Carter Center, bringing together many scholars and professionals in the FinTech sector in Georgia. Hosted by the Hong Kong Association of Atlanta and Georgia State University Confucius Institute, this event focuses on how Atlanta’s local companies can grasp the opportunities created by the development of financial technology in Hong Kong.
In her address to kick off the panel discussion, Anna Fan, the director of the NYC Office of the Hong Kong Trade Development Council in New York, gave the audience a comprehensive introduction of the FinTech ecosystem in Hong Kong. While the United States is the leading country of FinTech “unicorns” (privately held startup companies that are worth more than $1 billion), Fan pointed out that Hong Kong also has four FinTech unicorns. Given the relatively small size of Hong Kong, such a figure is impressive and indicates the important role played by FinTech in Hong Kong’s economy.
Speaking about other cities Greater Bay Area, Stephen D. Hassett, the chief operating officer of GT Software, argued that China is a great market for an open banking framework. Tommy Marshall, the FinTech Executive-In-Residence of the Advanced Technology Development Center at Georgia Tech, also believed that the large number of Ali Pay customers, as well as the growth of large corporations like Tencent and Alibaba, demonstrate that FinTech is creating a tremendous amount of economic opportunities in China. Marshall said that FinTech companies located in Georgia, which create more than 40,000 jobs, should seize the opportunities available in China, especially in the Greater Bay Area. Indeed, among all financial transactions around the world, 70% of them are materialized by companies which are headquartered in the Atlanta area. In other words, more than two-thirds of purchases, loans, mortgages, bank accounts, credit and debit cards in every corner of the planet are processed by Atlanta’s companies. Such performance of Atlanta’s FinTech firms can certainly put this city in a uniquely advantageous position to capitalize on its existing role as a flourishing FinTech hub and expand its market access into China.
Nevertheless, there are some obstacles faced by companies in Atlanta if they want to enter the Chinese market. Perhaps one of the most significant obstacles are Chinese governmental regulations. As Trevor Williams, the managing editor of Global Atlanta, suggested, China’s regulations often scare away small companies from making financial transactions in China. Also, since the Greater Bay Area involves Hong Kong, Macao, and mainland China, which all have completely separate jurisdictions, the financial regulations can be disparate.
In addition to regulations, another difficulty in entering a new market is how to obtain the trust of consumers. As argued by Scott Stewart, the East Coast International Tax Crypto/Blockchain Lead of Deloitte Tax LLP, the determining factor of success for FinTech companies is trust and governance. Much of the current FinTech software is open source, so a successful FinTech company must pass the “trust verification”, meaning an ability to maintain consumers’ trust and loyalty when it is challenged by the competitors.
While the overwhelming focus of the panel conference was on possible connections between Atlanta and the Greater Bay Area in the field of FinTech, other topics were also discussed. One issue was corporate social responsibility practices of FinTech companies in China. Before the second panel started, a clip of an interview with Alipay’s Chen Long on Bloomberg News was played which briefly touched on Alipay’s Ant Forest environmental initiative. Through this project, when people use Alipay to engage in environmentally friendly activities like taking public transportation, they can obtain credits called “green energy,” which can be used to grow virtual trees on the Alipay app. Then, Alipay would convert these virtual trees into actual trees by working with local partners to plant them in some Chinese desert areas. Based on the studies of Alibaba Group, this project has planted more than ten million trees from 2016 to 2017, helping reduce 1.22 million tons of carbon dioxide emissions.
Finally, Anna Fan made brief comments on the current protest in Hong Kong. She assured the audience that the situation in Hong Kong is not out of control. She stated that Hong Kong experienced much worse situations before, and this city and its people always recovered from difficult times. She argued that both sides love Hong Kong, and the central issue now should be how to move ahead for everybody.
Aug. 21, 2019
By Xiaoyi Lu
