A research report conducted by the Hong Kong Academy of Finance (AoF) has revealed that embracing frontier technologies is key to driving innovative products and services, increasing cost efficiency, and enhancing product distribution to support more effective long-term investing and financial planning in Hong Kong.

The survey interviewed 1,052 Hong Kong residents as well as 46 financial institutions and fintech companies in the city to gauge perspectives on long-term investment decisions and product development.

“As the trend of population ageing continues, it is imperative to prioritize long-term investing. The insights of this report can be helpful for market participants as they navigate existing challenges and foster business opportunities that contribute to developing a more comprehensive and healthy long-term investment ecosystem in Hong Kong," said Enoch Fung, chief executive officer (CEO) of the AoF.

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The strategic adoption of emerging technologies is critical for achieving scalability and reducing the cost of digital infrastructure, the report said. “By leveraging policy and regulatory support, including fintech sandboxes and industry collaborations, market participants can drive innovation and development, ultimately shaping the future of long-term investments,” it added.

The report identified financial education and targeted marketing initiatives as essential for boosting long-term investment financial planning, with a focus on the provision of decumulation financial products, which convert accumulated financial assets into stable and lifelong income streams to accommodate the demand for long-term financial planning.

“Currently the Hong Kong financial market provides post-retirement decumulation products, such as annuities, insurance products with savings or investment features, and inflation-linked bonds. As the government issues long-term bonds and green bonds, it can help financial institutions better match assets and liabilities for developing decumulation products. We believe Hong Kong's capital market possesses sufficient depth,” Fung said at a press conference on Monday.

The report identified three barriers hampering the market for decumulation financial products in Hong Kong, including insufficient awareness or skeptical attitudes (64 percent), limited customer understanding (60 percent), and mismatches between assets and liabilities of financial institutions (50 percent).

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The AoF was set up by the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC), the Insurance Authority and the Mandatory Provident Fund (MPF) Schemes Authority to serve as a repository of knowledge in applied monetary and financial research.