Another set of institutions have joined forces to stay ahead of the fintech revolution, this time in Hong Kong.

HSBC and the Hong Kong Applied Science and Technology Research Institute, or ASTRI, have teamed up to launch an innovation laboratory to drive financial technology, becoming the latest institutions to create such a venture.

The bank and the research body are rolling out the HSBC-ASTRI Research and Development Innovation Laboratory, they said this week. The lab will be located at ASTRI’s facility at Hong Kong Science Park.

Areas to be explored include artificial intelligence on Chinese character recognition; behavioural biometrics authentication; big data analytics; blockchain; cyber security; facial recognition and internet finance.

A number of financial organisations around the world have launched such “labs” to stay ahead of trends such as the use of machine learning, digital currencies and use of big data. PwC has launched an "innovation hub" in Singapore; DBS and Bank of Singapore, among others, have launched various initiatives. IBM has opened digital studios in South Korea and Singapore. In May this year, the Monetary Authority of Singapore and the UK's Financial Conduct Authority signed a cooperation agreement to allow financial technology firms in the two countries better access to each other's markets. The move by HSBC highlights how Hong Kong’s own financial community wishes to stay ahead in the fintech race. (To see a feature on this issue, click here.)

The lab will seek to apply ASTRI’s latest technologies, systems and platforms to address domain specified requirements of HSBC’s various businesses.

The organisations highlighted the use of artificial intelligence to facilitate Chinese character recognition. ASTRI has developed a system based on 4 million handwritten Chinese character images, which can be used by HSBC to make the traditionally time-consuming processing of manual forms more efficient.

“The development and application of fintech is crucial to maintaining Hong Kong’s status as a global financial centre, and that is why ASTRI has dedicated lots of talent and resources to the research and development of fintech,” said Wong Ming-yam, chairman of ASTRI. 

The financial sums involved in fintech spending are rising fast, despite, or possibly even because of, market volatility in recent months. Investment channeled into the global fintech sector shot up 75 per cent to $22.3 billion last year, according to figures from Accenture. In Asia-Pacific, investments more than quadrupled to $4.3 billion, with the lion’s share occurring in China ($1.97 billion) and India ($1.65 billion). In Europe, it more than doubled (120 per cent), while the number of deals rose by 51 per cent and investments in German ventures alone swelled 843 per cent. Investments in the North American fintech sector (the world's largest) grew more modestly, by 44 per cent to $14.8 billion; the US continued to dominate the sector with 667 fintech deals - a 16 per cent increase.