The Hong Kong Monetary Authority has unveiled some initiatives to promote something it calls 'smart banking.' They consist of a faster payment system; a fintech 'sandbox 2.0'; the promotion of virtual banking; a 'banking made easy' initiative; an open application programming interface; and closer cross-border collaboration with other regulators.

Both banks and Stored Value Facilities (SVF) operators can participate in the Faster Payment System or FPS, which supports the use of mobile phone numbers or email addresses for payments in Hong Kong dollars and renminbi anytime and anywhere. The FPS is timed for September 2018. The HKMA has also helped to set up an industry working group to facilitate a common QR code standard, which would promote the wider use of mobile retail payments and greater convenience to customers and merchants.

There is to be an "enhanced Fintech Supervisory Sandbox 2.0." This will have three new features: (i) a fintech supervisory chatroom that will provide speedy feedback to banks and tech firms at an early stage of their fintech projects; (ii) direct access for tech firms to the sandbox, allowing them to seek feedback from the chatroom without necessarily going through a bank; (iii) the linking-up of the sandboxes of the HKMA, the Securities and Futures Commission and the Insurance Authority to create a single point of entry for the pilot trials of cross-sector fintech products. This is timed for the end of the year.

The HKMA has welcomed the introduction of virtual banks in Hong Kong and will consult the financial sector about the idea of amending the Guide to Authorisation of Virtual Banks that it issued in 2000.

A new task force will be set up at the HKMA to work with the banking industry to minimise "regulatory frictions" that might mar customers’ digital experiences, especially when they are taking part in remote onboarding, online finance and online wealth management. The regulator will also come up with a new policy to promote Open Application Programming Interfaces in the banking sector. The idea here is to stimulate innovation and help banks and IT firms collaborate with one another. The HKMA aims to finalise its Open API policy for the banking sector around the end of the year. The regulator is pursuing a closer relationship with the Office of Financial Development Service of the Shenzhen Municipal Government. It is also reaching out to the Hong Kong Applied Science and Technology Research Institute, Science Park and Cyberport to promote the introduction of new technology and processes that will bring about higher speed and greater convenience to bank customers, and to nurture fintech talents in Hong Kong.