HONG KONG • Tax benefits, government help and easy access to regional markets led Mr Joe Seunghyun Cho to choose Singapore as the headquarters for his six financial technology companies, rather than base them in the rival hub of Hong Kong or his native South Korea.
"We are quite impressed by government agencies here," said Mr Cho, whose Marvelstone Group is developing a mobile payments platform and has investments in other fintech firms. The Singapore authorities introduced him to tax advantages and connected his firm to potential partners.
Many fintech firms are making similar choices, adding a new dimension to the decades-old tussle between Singapore and Hong Kong for the position as Asia's premier financial centre. With banks' profits under pressure from stricter global regulations and rising compliance costs, it's a fight either city can ill afford to lose. Interviews with entrepreneurs show that while Hong Kong is making strides to catch up, Singapore has the lead - in part because its government was quicker in recognising the industry's potential.
In a February study commissioned by the British government, E&Y ranked the South-east Asian nation fourth among global fintech hubs. Hong Kong came in seventh. Singapore was the "preferred gateway" into Asia, it said, highlighting its "increasingly progressive regulatory regime".
"Financial services is an important contributor to economic growth and jobs in these cities," said Mr Mohit Mehrotra, Deloitte's strategy consulting leader for South-east Asia. "The key is to build up players that can supply innovative technology solutions to the financial services industry and support the growth of the ecosystem."
Investors poured US$10.5 billion (S$14.9 billion) into fintech in the Asia-Pacific this year, about US$2 billion more than in Europe and the United States combined, an analysis by Accenture, based on CB Insights data, found. The bulk of that money went to mainland China.
The gap between Hong Kong and Singapore was seen last month when the Singapore Fintech Festival drew more than 11,000 attendees and a similar Hong Kong event a week earlier drew less than a quarter of that number. Undeterred, Hong Kong is moving to catch up. Its monetary authority unveiled a Fintech Innovation Hub in September to bring banks, start-ups and central bank representatives together to develop fintech ideas.