Last week the media uncovered that as many as 1.25 million contactless credit cards issued by seven local banks may have built-in security loopholes through which hackers might gain access to sensitive personal information of the card holders, including their names and transaction records.
After the security risks came to light, the Monetary Authority reacted quickly and ordered the banks to replace those credit cards immediately with new ones that have a more robust security mechanism.
An article which appeared in the overseas edition of the People’s Daily recently, pointed out that our Octopus Card is already obsolete, compared with the mainland’s Aliyun and WeChat payment systems.
In fact, the relatively loose regulation of online payment systems by mainland authorities has given rise to numerous new “smart” payment platforms that have taken the country by storm and become increasingly popular among Chinese consumers.
However, loose regulation is a double-edged sword; consumers are using these platforms at their own risk as their private data may not be fully protected.
In comparison, the development of financial technology in Hong Kong is relatively slow, partly because of the rigorous legal and technological requirements laid down by the authorities.
While strict government regulations in Hong Kong can guarantee that our personal data is more protected, it also inevitably restricts the room for innovation and hinders new development.
Therefore, our government is facing a difficult issue as to how to strike a balance between protecting the interests of consumers and facilitating technological advancement in the financial service industry.
In March this year, the Financial Services and the Treasury Bureau set up a “steering group on financial technologies” to advise the government on this matter.
I personally do have high expectations for this committee and hope that it can provide the administration with some useful insights into how we can avoid overregulation and boost technological innovations in the financial service industry while not undermining consumer protection.
Meanwhile, the Legislative Council’s Financial Committee again discussed the government’s request for funding to set up the Innovation and Technology Bureau last Friday.
As compared to previous discussions, I was glad to see that my fellow lawmakers from both the pro-establishment and pan-democratic camps finally agreed to set aside their political differences and got down to real business.
How the bureau can coordinate different departments, its policy direction and mid- to long-term targets would be some of the key issues the government needs to address and clarify.
But for the bureau to work, all government department heads must embrace the mindset of encouraging and facilitating technological innovations in their everyday work.
This article appeared in the Hong Kong Economic Journal on Oct. 22.
Translation by Alan Lee