Additionally, blockchain, robotics and augmented reality are also being explored by banks to improve their services or streamline their operations. 17. To further support the development of Fintech in the banking sector, I am pleased to announce today the launch of HKMA’s second initiative, which is the “Fintech Supervisory Sandbox”. This Sandbox allows banks to conduct testing and trial of newly developed technologies and applications on a pilot basis. Within the Sandbox, banks can try out their new Fintech products without the need to achieve full compliance with the HKMA’s usual supervisory requirements. This will enable banks to gather real-life data and user feedback on their Fintech products or services more easily and in a controlled environment, so that they can make suitable refinements to their products before the full launch. The HKMA does not intend to stipulate an exhaustive list of the supervisory requirements that may potentially be relaxed within the Sandbox. Examples of these requirements include security-related requirements for electronic banking services and the timing of independent assessment prior to launching of new technology services. Banks intending to access the Sandbox are advised to get in touch with the HKMA early. My HKMA colleagues stand ready to discuss with the banks individually on the appropriate supervisory flexibility that can be made available to them within the Fintech Supervisory Sandbox. 18. Further details of the Fintech Innovation Hub and the Fintech Supervisory Sandbox will be announced by the HKMA later today. Competition from neighbouring centres 19.

New concepts in various facial or voice recognition techniques could be demonstrated by the developers in the Fintech Innovation Hub to gather feedback from potential users and to receive regulatory guidance from supervisors at an early stage. This should help shorten the time-to-market of useful industry-wide solutions. Second, I envisage that the Fintech Innovation Hub will also benefit the HKMA. In this place, we could explore with innovators options and possibilities of using new technologies, such as Big Data Analytics and other “regtech” initiatives, to achieve our objectives  BIS central bankers’ speeches  3  more effectively without creating undue risks or burden for our internal systems or databases. Fintech Supervisory Sandbox 16. Meanwhile, there is also a quite commonly-held perception that the development of Fintech in the financial services sector in Hong Kong has been slow. I do not subscribe to this view, at least insofar as the banking sector is concerned. In the past few months, banks and stored value facility operators have already launched new payment facilities built on smart phones and Near Field Communication technology. These facilities have the potential of altering fundamentally the way consumers make payments. Many banks have also reported to the HKMA their intention to roll out very soon new technology with a view to providing more secure and efficient services to customers. I mentioned earlier biometrics authentication technology involving voiceprints and fingerprints. This is indeed something that many banks are planning to roll out.