Experts are calling for a shake-up of FinTech regulations in China and Hong Kong as many believe that existing laws aren’t maintaining the technology’s pace.

China is widely regarded as one of the global leaders in FinTech, which is evident from its mobile payments and FinTech services such as Ant Financial, Qudian, Lufax, and ZhongAn. An October report found that it was these four financial technology firms, which had made it in the top five of the FinTech 100 report.

In a report from the South China Morning Post, it states that Ant Financial, which operates online payment platform Alipay and Tencent, which operates the WeChat Wallet make up 70 percent of the third party online payments market in China.

However, while China and Hong Kong’s innovation within FinTech has increased over the years with many turning to the sector to help them circumvent inefficiencies within the financial services, many FinTech companies would welcome better regulations to help the industry grow.

Lawrence Yu, chief executive of online financial investment platform Shulaibao, said that when rules have been set, companies have a better chance of succeeding.

He said:

Everything is fair when the rules are enforced. A clear, reasonable regulatory body would help [fintech] startups to grow.

When it comes to capital venture investment within the industry, China is leading the way after a report illustrated that funding continued to rise in 2016 as other markets experienced a slowdown in the sector. As the report found the biggest financial technology private companies by total value are those within China: Ant Financial, valued at US$60 billion and Lu.com, which is valued at US$18 billion.

Hong Kong, too, is attempting to step up its game when it comes to financial technology regulation.

Last September, the Hong Kong Monetary Authority launched its FinTech Supervisory Sandbox to enable banks to test out technologies within the sector. However, it appears that this is only available to banks and not to startups too who could greatly benefit from it.

Yet, while the Hong Kong Central Bank warned late last year that blockchain could increase the risk of money laundering, it risks the chance of falling significantly behind its competitors if it doesn’t continue to explore blockchain despite the regulatory hurdles that it faces. The financial secretary of Hong Kong, though, has pledged HKD $17 billion toward the development of a FinTech ecosystem in the country.

Despite this, however, both nations risk lagging behind other countries due to a lack of clear regulations. Singapore is one such country that is boosting its blockchain and FinTech sectors after launching its accelerator program, FinLab last summer and already poses a threat to China and Hong Kong.

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