Press Release: RegTech market in Hong Kong expanded 10 times in last 5 years
2 November 2020
Hong Kong’s regulatory technology (RegTech) industry has expanded around 10 times in the number of RegTech companies in recent 5 years, and each of the one-fifth of surveyed RegTech companies are targeting to raise over 5 million USD venture investment in 2021, revealed by a study from the RegTech Association of Hong Kong.
RegTech Association of Hong Kong (RTAHK) today released the Hong Kong’s first Regulatory Technology (RegTech) landscape study, titled "Hong Kong RegTech Map 2020". The study is based on industry-wide research and survey carried out by the RTAHK and co-supported by Cyberport, InvestHK and Moment Fintech, which aims to understand the market and investment potential of RegTech industry in Hong Kong, the technological driving forces behind those rising startups and the sectors which can be benefited from RegTech.
The study was conducted in October 2020, mostly with RegTech companies from Cyberport and Hong Kong Science Park as well as industry organisations. One of the key findings showed the number of RegTech companies in Hong Kong has increased 10 times in last 5 years, about half of them are start-ups with less than 2 years in operation.
Although the RegTech industry is young in Hong Kong, it is energetically booming and targeting a strong inflow of venture investment. Over 17% of these fast growing RegTech companies have plans for fundraising of over 5 million USD in 2021, driven by both the technological advances in their solutions and the massive market needs in RegTech in Hong Kong.
Among the surveyed Regtech companies, nearly 80% of their solutions are driven by advances in artificial intelligence and machine learning technologies, accompanied with data analytics, cloud computing and rule-based expert systems. Not limited to the financial industry, their solutions can be applied over multiple industries. Some of our surveyed companies target Government/Civil Service, Software Technology Industries, Construction and Real Estate etc.
The study also contains a snapshot of 100 Hong Kong RegTech stakeholders, half of which are some of the best home-grown RegTech startups and solution providers, portraying a blueprint of the strong and growing Hong Kong RegTech ecosystem.
Commenting on the release of the study, Felix Cheung, Chairman of the RegTech Association of Hong Kong, said "RTAHK is proud to release the first Hong Kong RegTech Map and will be committed to building a thriving ecosystem for RegTech. Initiatives like this will help place RegTech in Hong Kong on the global map and enable RegTech to tap on opportunities that already exist as they transform and grow. The adoption of RegTech is going to bring profound changes to how organisations comply, monitor and respond to financial regulation."
The map is available on the RTAHK website.
Figure 1. RegTech helps all industries
All the surveyed RegTech solution providers targeted financial institutions as potential clients and more than half are targeting clients outside the Financial industry. 64% claimed to target the Government/Civil Service and 36% claimed to target the Software Technology industries.
Figure 2. AI empowers RegTech
Survey findings confirm the artificial intelligence, data analytics, cloud computing and rule-based expert systems are the primary tools and technologies involved in RegTech solutions.
Figure 3. RegTech is young and booming
RegTech is a young industry in Hong Kong. Almost 93% of the RegTech solution providers in the survey have been operating for less than 5 years, and about one half of those have been operating for less than 2 years in Hong Kong.
Figure 4. RegTech expecting investment to skyrocket in 2021
RegTech solution providers are expecting a strong investment scene in 2021. About 60% of the responded RegTech solution providers are planning to raise over US$2m and 17% are planning to raise over US$5m next year.
Figure 5. Hong Kong RegTech Map 2020
A snapshot of 100 Hong Kong RegTech stakeholders, half of which are some of the best home-grown RegTech startups and solution providers, portraying a blueprint of the strong and growing Hong Kong RegTech ecosystem
For media enquiries, please contact:
Felix Cheung
Chairman, RegTech Association of Hong Kong
Tel: (852) 3955 2778
Email: felix@rtahk.org
About RegTech Association of Hong Kong
The RegTech Association of Hong Kong (RTAHK) is an independent and not-for-profit association established in 2019. Its objective is to promote RegTech and to facilitate collaboration among participants and stakeholders of the RegTech ecosystem in Hong Kong and beyond. It represents the full range of stakeholders in the RegTech industry, from early-stage innovative companies to large organisations and service providers.