Exclusive: Why is FinTech the Golden Opportunity for Graduates?By Aug 28, 2019 9 Min Read
Qualifications such as CFA, CFP, are the golden benchmarks for financial professionals with their renowned global recognition. With the growing influence of the FinTech industry, what is the golden standard for FinTech professionals?
We are delighted to speak with Paul Pong, Chairman of the Institute of Financial Technologies of Asia (IFTA) to share with us how IFTA is building the FinTech ecosystem with the Certified Financial Technologists (CFT). Paul also highlights that FinTech is the golden opportunity for graduates!
What is the primary purpose of the foundation of the Institute of Financial Technologies of Asia (IFTA) and Certified Financial Technologists (CFT)?
IFTA is a nonprofit organization. One of the objectives is to uphold the FinTech benchmark as a global qualification. We want to create a Certified Financial Technologist (CFT) community because we can grow the community internationally, starting in Hong Kong, Taiwan, China, Japan, and in other Asian countries and then globally. Qualified CFTs will have access to annual seminars and meet-ups. They can mingle with other people from the FinTech industry to exchange ideas.
The reason for setting up the CFT community relates to my past successful experience in setting up a Certified Financial Planner (CFP) program and The Hong Kong Institute of Financial Analysts and Professional Commentators in 2000. For CFP, we set it up as a global destination starting in Hong Kong. We reached 11 countries initially and we have reached around 50 countries today. There are around 350,000 CFPs in Hong Kong and mainland China and 200,000 CFPs in Japan. We believe that it is beneficial because many people in the banking or financial planning sector want to be professionally qualified.
Besides, I was the chairman of the Institute of Financial Planners of Hong Kong (IFPHK) and we helped graduates to become financial professionals and gain global recognition. Qualifications like CPA, CFA, FRM, and CFP have gained worldwide recognition and gave Hong Kongers the edge working in the Greater Bay Area.
Is the IFTA working with the HK government regulators such as the SFC or HKMA? What does FinTech mean for graduates?
When we first set up IFTA, we visited various regulators such as HKMA, HKSFC, IA, and MPFA to promote the objective of IFTA. Although Hong Kong is the international financial hub, they need to catch up with the FinTech development. The tech component of FinTech is currently lagged in Hong Kong. The government has devoted lots of resources to support technological growth but Hong Kong still needs to catch up with FinTech development.
Take virtual banking as an example. There are 8 licensed virtual banks in Hong Kong. However, there is a shortage of talents who excel in both finance and technology. I noticed that some universities like HKBU, HKUST, CUHK are offering a Master’s program of FinTech to address the problem of the FinTech talent shortage. We also talked with HKU Space to provide CFT courses and the remuneration of FinTech jobs is attractive for graduates.
Traditional banking giants need to revise their strategies with the advent of virtual banking. When HKMA approved 8 virtual banking licenses, we can see that banking giants like HSBC waived the fees of minimum deposit on all accounts. Virtual banking enables massive scaling and with its attributes like 24-hour services, this is beneficial to consumers.
The adoption of weighted voting rights by the Hong Kong Stock Exchange provides the gateway for tech startups to be listed in the future. This is the golden opportunity for graduates to build a promising career path in FinTech.
Some of the founding members of IFTA are from large traditional institutions, such as Hang Seng, Deloitte, and Octopus. How do these experienced members help to foster a greater FinTech community?
These members foster a greater FinTech community in two ways. The first way is to set up a new FinTech company like virtual banking. For traditional companies who wish to deploy FinTech into their operations, they often failed to do so because of a lack of talents. Partners like Hang Seng Bank want to tackle this issue by joining the IFTA community.
The other way is transforming a finance or tech company into a FinTech company. Take Octopus as an example, and they have been so successful in the past years with little competition faced. The emergence of FinTech can be both opportunities and threats to giants like Octopus. If Octopus does not catch up with the latest FinTech development, it can be lagged against its competitors. That’s why companies like Octopus are joining the IFTA community to retain their competitive advantage.
We believe our readers would like to learn more about the CFT program. What are the qualifications of the CFT program?
There are 3 levels of the CFT program. If you passed level one of the CFT exams with at least one-year relevant work experience, you are qualified as Associate Financial Technologist (AFT). You will be qualified as CFT once you passed level three of the CFT exam with three years of working experience. As the qualified CFT, you are required to pay annual fees and take CPT courses annually.
For the syllabus of the CFT program, 55% are tech courses while finance courses account for the remaining 45%. If you are a CFA, CFP, or HKSI member that passed paper 7,8,9, and 12, you are exempted from the finance modules in the CFT program.
For the exemption on tech modules, it depends on the FinTech degree provided by universities in Hong Kong. When candidates complete the FinTech undergraduate degree of Hong Kong Polytechnic University (PolyU) and the Chinese University of Hong Kong (CUHK), they are exempted from the tech module in the level one of the CFT exams. We are discussing with HKU Space to explore whether their program is eligible for exemption in the CFT exam.
Why are ethics so important in the CFT program?
Besides, candidates must pass the ethics module of the CFT exam. Ethics is essential in the practice of service leadership. HKSFC requires that ethics courses account for at least 20% of total CPT courses. In the area of FinTech, ethics is critical and tech companies need to comply with different regulations such as anti-trust law, privacy law, and GDPR to mitigate conflict of interests.
Our ethics module is customer-oriented. We want to set the highest ethical standard in the practice of FinTech. By placing a high ethical standard, the ultimate beneficiaries with be the users in the FinTech industry.
For CFT, the examination of the ethics module is available in Hong Kong only because the interpretation of ethics is different in Hong Kong and China. Besides, qualified CFTs are required to attend at least 15 hours of Continuous Professional Training (CPT) courses in Hong Kong. By gathering the CFT professionals in Hong Kong, we can attract talents from different countries, which is essential for Hong Kong to catch up the technology development with Shenzhen.
What are the key differences of the Code of Ethics in CFT, compared with CFA?
The Code of Ethics in CFT catered for service leadership, the key trend in the FinTech field. I would say entrepreneurs in the FinTech field are dreamers. If they want to achieve their dreams, their mission and policies set in the company have to be ethical.
The main difference is that the Code of Ethics in the financial industry is more technical and based on theory. For the Code of Ethics in CFT, we have invited a professor that used to teach at Harvard University and currently Senior Advisor to General Education at Hong Kong Baptist University to complete the first draft. We received positive feedback on the Code of Ethics from regulators like HKSFC, IA and other founding members. For small to medium enterprises, our Code of Ethics helps them to obtain the highest ethical standard in FinTech operations. By adhering to the Code of Ethics in CFT, the management in FinTech firms will think one step ahead of the regulatory requirement. They will adhere to the ethical standards proactively rather than a compulsory requirement to stay compliant.
What’s the recognition of CFT like in other Asian regions like mainland China and Singapore? How does the IFTA boost the recognition of CFT in these areas?
We continue to boost the recognition of CFT to other Asian regions in 3 ways:
1) Recruit founding members in other Asian regions
We have established the CFT program for one year, which is still at the early stage. We have set up our business model in Hong Kong and we plan to extend that model to Taiwan. My other two partners possess a strong background in finance or technology, respectively. They are bridging finance and tech companies to be the founding members of IFTA in Taiwan by 2019. When the founding members in Taiwan are set up, we will start building the ecosystem of CFT, like what we are doing in Hong Kong.
We have stakeholders from the government, universities, individuals, and corporations. While corporations are seeking FinTech talents, they can provide internship, scholarships and job opportunities.
2) IFTA Fintech Achievement Award
To connect with various stakeholders, we have established the “IFTA Fintech Achievement Award 2018” in Hong Kong Feb 2019.
We noticed that there were many FinTech companies that were not part of the Cyberport and Science Park community, and we wish to provide them a platform to be recognized and join the FinTech community. The Financial Services and the Treasury Bureau (FSB) and Innovation and Technology Bureau (ITB) in Hong Kong both support the initiatives of the award, and we have invited the Undersecretary from both sides, Mr. Joseph Chan, JP, and Dr. David Chung, JP to attend as Guest of Honor. We plan to extend our “IFTA Fintech Achievement Award” to other Asian regions like Taiwan and Shanghai.
3) Organize FinTech Week in other regions
We noticed that both Hong Kong and Singapore had organized Fintech week and Taiwan is organizing that as well. We are planning to organize FinTech week in China to connect young talents and corporations.
I believe Hong Kong is a good starting point to build the FinTech hub in Asia because of the transparent legal system, sound financial system, and exchanges. We then start distributing FinTech services to the Greater Bay Area, then countries in the “Belt and Road” initiative and the rest of the world. By connecting with global talents, Hong Kong can attract these talents, which helps to nurture more FinTech talents for the next generation.
With the existing renowned certifications like CFA and CAIA start including blockchain and cryptocurrencies into their syllabus, how do you compare the CFT program against the others?
I cannot say the difference between them as I do not study the syllabus of the CFA program thoroughly. Our syllabus is catered for the FinTech industry with courses in software engineering, programming language, cybersecurity, and cloud computing.
Take cybersecurity as an example. We can see that companies like Alibaba, Amazon, and Microsoft tapped into the cloud computing industry. IBM is expanding its cloud computing business with the acquisition of Red Hat. Cybersecurity will be increasingly critical with the surging demand for data privacy.
As local universities in Hong Kong like HKUST, CUHK and HKBU are offering FinTech Masters, how do you compare CFT against these master programs?
I believe the positioning of master programs offered by universities is different. Some programs emphasize in artificial intelligence or blockchain, while some programs focus on cybersecurity. I think cybersecurity is the most significant trend for FinTech as FinTech companies need to stay compliant. For CFT, we do not focus on a specific FinTech application.
Some universities in Hong Kong are founding members of IFTA. We communicated with them frequently on the changes in the curriculum of the Master's program and discussed whether the exemption offered in the CFT should be changed accordingly.
The syllabus of CFT will be constantly updated with the global FinTech landscape. We carefully monitor the FinTech development of China and the U.S. where they have the most FinTech talents. I believe China, Europe, and the U.S. will be the major players of FinTech in the future.