Two rival entities, the Monetary Authority of Singapore and the Hong Kong Monetary Authority, inked an agreement to fortify their existing cooperation on financial technology. As part of the agreement, MAS and HKMA pledged to collaborate on a strategic project on trade finance cross-border infrastructure, based on distributed ledger technology, as their first joint initiative.
The two regulators will lay out more details on the project in November.
Meanwhile, the two entities will also facilitate referrals of innovative businesses, share information, and exchange expertise, to facilitate financial innovation in Singapore and Hong Kong.
HKMA Chief Executive Norman Chan said the two countries are leading international financial centres in the region and are actively deploying FinTech. Singapore and Hong Kong have been on a tight fintech race over the past couple of years.
"Collaboration between the HKMA and MAS will create significant synergy for the development of fintech and more efficient fund flows between the two markets," he said.
The signing of the deal was during the Hong Kong Fintech Week. Singapore will hold its own fintech festival in November.
Chan noted that the planned cross-border infrastructure will connect Hong Kong Trade Finance Platform with a similar structure in Singapore. In fact, there are already seven banks which pledged their participation to the platform.
"Technology is a game changer for the future of banking and payment services. It will differentiate winners from losers," he said.
MAS Managing Director Ravi Menon said this deal is one of Singapore's more significant FinTech co-operation agreements, given the extensive financial and trade linkages between the two countries.
" We are especially pleased that we have a live project to enhance the trade finance corridor between the two financial centres," he said.
A report from Bloomberg said fintech investments in Asia are on track to set a fresh record in 2017. Citing data from CB Insights, the report said venture capital-backed startups raised more than US$5 billion in the first nine months of the year, closing in on last year's US$6.3 billion.