Impact investing and fintech key to more inclusive socioeconomic development

Panelists and the audience listen to one of the participants sharing her thoughts at the roundtable discussion themed Unleashing Impact Investing in Asia, co-organized by China Daily and the 2019 Asian Financial Forum, at the Hong Kong Convention and Exhibition Centre on Jan 15. (EDMOND TANG / CHINA DAILY)

The rise of financial technology and sustainable investing not only leads to a more inclusive banking and finance sector, but also helps to promote socioeconomic development, speakers at the 2019 Asian Financial Forum said on Jan 15.

The region is adjusting its trade pattern to cope with increasing inflow of goods and services, as Asians explore their own way as major contributors to global growth, participants said at the second and concluding day of the forum.

The forum began with a breakfast panel on Hong Kong’s Role in the Changing Multilateral Trade Landscape, with Laurence Li, chairman of the Financial Services Development Council, moderating.

In his address, Edward Yau Tang-wah, Hong Kong secretary for commerce and economic development, underlined the city’s deftness in adapting to changes. 

“The trade war (between the United States and China) benefits no one,” he said. “We’ll support free trade and defend the multilateral trading system.”

The best way to counter uncertainty is certainty, Yau said. “We’ll also find ways to build bridges with other trading partners, as we have concluded or signed new trade arrangements. We’re building a better environment for businesses.” 

Asia will modify its trade pattern while leading global growth not only by manufacturing but also by consumption, said Victor K. Fung, chairman of international supply chain firm Fung Group. As more people in Asia join the middle-class consumer group, the inflow of goods into the region will increase.

Hong Kong is redefining its role to accommodate the new pattern of trade flows, especially under the framework of the Belt and Road Initiative, Fung said.

The region will also become more inclusive as financial benefits reach more people through new technology, said Benjamin Hung Pi-cheng, regional chief executive officer of Greater China & North Asia at Standard Chartered Bank.

John Slosar, chairman of Cathay Pacific Airways, sees Hong Kong tapping its role in logistics and finance despite the uncertainties.

Zhou Li, editorial board member, China Daily Group and publisher and editor-in-chief of China Daily Asia Pacific, said it is reassuring to find Hong Kong entrepreneurs investing in private equities that have pledged to make a difference.

Addressing a China Daily roundtable discussion on impact investing, he said such investments will benefit fields such as education, healthcare, renewable energy, provide financial aid, and infrastructural and technological support to the needy, and help with containing the looming food crisis.

For Judy Chen, chairman of the United Nations Children’s Emergency Fund (UNICEF) in Hong Kong, the best investment is something that will “create a better world for the next generation”. 

She said that new tools like financial technology help corporate and private donors to work better, raising more funds for the organization.

Amy Lo, co-head for UBS Wealth Management in Asia-Pacific, and one of the roundtable panelists, said, “Sustainable investment is now one of the world’s megatrends.”

Noting that the private sector has a role to play “in making the world a better place,” Lo said that clients have been encouraged to invest in companies based on environmental, social and governance criteria but without sacrificing monetary returns. 

She said UBS is also raising US$5 billion to help fill the funding gap needed to meet the Sustainable Development Goals set by the United Nations.

The SDGs, which were approved in 2015 by 193 UN member countries, form a blueprint to address the world’s most pressing problems by 2030. The 17 goals include the eradication of extreme poverty, halting deforestation, promoting gender equality, and reducing conflict.

Ronnie Mak, managing director of the Hong Kong-based sustainable investing firm RS Group, said more mature investors like those in Europe and the US are also looking into impact investing in Asia.

“But regional providers also need to provide this kind of product ourselves. We do it our way as an Asian bank has its own (set of) values,” she said. 

Naina Subberwal Batra, chairperson and CEO of the Singapore-based Asian Venture Philanthropy Network, said: “Everybody wants to do good, but many people would just (allocate) 5 percent of their portfolio (to sustainable investing).”

Batra said one of the ways to persuade more people to get into sustainable investing is to show the concrete impact of such investments.

“We need to come up with a universal metric (because) investors want to see a clear return (on their investments),” she said.

Pindar Wong, chairman of internet financial infrastructure consultancy VeriFi (Hong Kong), chief architect of the Belt and Road Blockchain Consortium, told China Daily that the “problem with impact investing is there’s no real way to measure the social impact”. 

“If we don’t have impact investing, which encourages sustainable industries, we don’t have very much left,” he said. 

Financial technology, or fintech, has democratized access to banking and finance services, allowing the sector to reach out to other segments of the population that are not served by traditional banks. Tencent-controlled WeBank is the first digital bank in China, allowing anyone with a smartphone to avail of microloans.

Addressing a panel discussion on Financial Development in the Guangdong-Hong Kong-Macao Greater Bay Area: The Future of Fintech, Ma Zhitao, WeBank’s vice-president and chief information officer, said fintech has allowed a virtual bank like WeBank to provide services to the once “unbanked” segments of the population.

He said WeBank has over 6 million clients, most of whom are small and medium entrepreneurs who borrow an average of 1,000 yuan (US$148) per transaction.

Li Yang, chairman of the Beijing-based think tank National Institution for Finance and Development, said China’s fintech development must serve the real economy. Big data, artificial intelligence and security technology can be deployed by the financial sector, Li said in his keynote speech. 

In another panel discussion on fintech, Matthew Phillips, China and Hong Kong financial services leader at PwC Hong Kong, said more than 80 percent of interviewed organizations have some involvement with blockchain technology. 

“The finance services sector leads in the adoption of block chain technology, with applications related to payment, foreign exchange and trade,” said Phillips. He expects China to take the leading position in the development of blockchain in three years. 

FinTech Association of Malaysia President Mohammad Ridzuan Abdul Aziz said Malaysia will cooperate with other fintech associations in the region in terms of talent, funding, branding, digital implementation and regulatory harmonization. 

Takeshi Kito, commissioner of the Fintech Association of Japan, said the association will connect more with the international market and jointly execute projects to improve the regional fintech ecosystem. 

Singapore FinTech Association President Chia Hock Lai expects regional fintech companies to further connect with each other, sharing knowledge and talent. 

On the second day of the forum, there were also panel discussions and fireside chats on the integration of traditional and new economies, investing in Asia’s entrepreneurs and startups, cultural transformation, smart forex fintech for Hong Kong, digital finance business in the Greater Bay Area, and how technology will transform the asset management business and cybersecurity.

Participants also had the chance to view the Hong Kong Trade Development Council’s Fintech Showcase platform to connect with potential business partners through the deal flow matchmaking session and investor alley, get valuable business advice through the startup clinic, and get to know more about investing globally through global investment zones that featured Cambodia, Italy, Spain, Germany and other countries.

Pamela Yu contributed to the story.

Contact the writers at prime@chinadailyapac.com