But interest in this market at the retail level has been slow to develop. The paper is predominantly held by banks for liquidity purposes and a small part is held by institutional investors. There are a number of reasons behind this lack of retailer interest. First, at least until recently, the real interest rate has been low and sometimes negative, and so the yield of Exchange Fund paper has not been attractive. Second, as issuer, the Hong Kong Monetary Authority does not have the capacity to market the paper at the retail level. And, quite understandably, the banks who are recognised dealers and market makers are not keen to market the product for us in view of the possible impact on their deposit base. Third, there is no convenient market infrastructure, in terms of both market information and mechanisms for participation, through which retail investors can access that market. 1  BIS Review 84/1999  They may be other reasons. But to the extent that these three reasons are significant, our plan here to list the longer term paper, what we call the Exchange Fund Notes, on the Hong Kong Stock Exchange, and have trades settled through the established securities clearing system of CCASS, at a time when there is a significant positive real interest rate, should effectively address them. According to this plan, Exchange Fund Notes will be listed on the Hong Kong Stock Exchange on 16 August 1999.
According to the Ernst&Young’s Fintech Adoption Index, one-third of consumers utilize at least two or more fintech services and they are becoming increasingly aware of FinTech as a part of their daily lives. The FinTech Adoption Index for services offered by FinTech organizations under five broad categories – money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance, indicates that money transfers and payment services are continuing to lead the FinTech change, with adoption standing at 50% in 2017 and 88% of consumers anticipating of doing so in the future. Thus, the global payments industry is currently undergoing a paradigm shift driven by rapid advances, the influx of new technologies and evolving consumer behavior as digital generations come of age. The emerging FinTech enhances the transformative power of digital payments via innovation. The irruption of digital payments relates to its many opportunities. Embracing payments digitalization has the potential to substantially reduce the costs, increase the efficiency and enable broader access to payment services. With the rise of new payment digital technologies developed by the FinTech, and increasingly adopted by banks, consumers and merchants nowadays have a wide range of payment products to choose from. Innovation developments, such as instant payments, payment initiation services, person-to-person mobile payments and contactless proximity payments have the digitization process accompanied by innovative solutions in their essence. The payment innovations and digitization process also have an impact on the transformation of payment market infrastructures.