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1、Envisioning Programmable Payments in Hong KongHow could an e-HKD further improve payments in Hong Kong?Oliver Wyman2Envisioning Programmable Payments In Hong KongAcknowledgementCo-authors of the white paperAppraised as the“Best Retail Bank in Hong Kong”by The Asian Banker for six consecutive years,H
2、ang Seng Bank is a leading financial institution in Hong Kong.Hang Seng Bank offers a wide range of financial products and services to individuals,businesses,and institutions,including personal banking,commercial banking,wealth management,and insurance.With a strong commitment to innovation and cust
3、omer centricity,Hang Seng Bank has established itself as a trusted and reliable partner for its customers,helping them achieve their financial goals and navigate the ever-changing landscape of the global economy.Hang Seng Bank is one of the sixteen firms that participated in Phase 1 of the e-HKD Pil
4、ot Programme.One of their use cases was awarded the“Best Use Case Award”at the Global Fast Track 2022s CBDC Track Pitching Competition in November 2022.For more information,visit Oliver Wyman is a global leader in management consulting.With offices in more than 70 cities across 30 countries,Oliver W
5、yman combines deep industry knowledge with specialized expertise in strategy,operations,risk management,and organization transformation.The firm has 7,000 professionals around the world who work with clients to optimize their business,improve their operations and risk profile,and accelerate their or
6、ganizational performance to seize the most attractive opportunities.Oliver Wyman is a business of Marsh McLennan NYSE:MMC.For more information,visit Oliver Wyman3Envisioning Programmable Payments In Hong KongAcknowledgementWith inputs fromThe Hong Kong Monetary Authority(HKMA)is Hong Kongs central b
7、anking institution and an integral part of the Hong Kong Special Administrative Region Government.The HKMA has four main functions:maintaining currency stability within the framework of the Linked Exchange Rate System;promoting the stability and integrity of the financial system,including the bankin
8、g system;helping to maintain Hong Kongs status as an international financial centre;and managing the Exchange Fund.For more information,visit www.hkma.gov.hk Oliver Wyman4Envisioning Programmable Payments In Hong KongForewordGilbert LeeHead of Strategy&Planning and Chief of Staff to Chief Executive
9、of Hang Seng BankWe are delighted to present the final report of our e-HKD real-life simulation,conducted as part of the Hong Kong Monetary Authoritys e-HKD Pilot Programme.This report summarises valuable feedback collected from participants,reflecting the potential of e-HKD and providing references
10、 for regulators,policymakers,and industry players.As a leading advocate of central bank digital currency(“CBDC”)in Hong Kong and Mainland China,Hang Seng actively participates in CBDC research and development.In 2023,we successfully created innovative e-HKD use cases and conducted real-life simulati
11、ons in collaboration with strategic partners and industry players.Looking ahead,we will continue to actively participate in discussions,share insights,and contribute to CBDC development in the region while supporting other HKMA initiatives.Special thanks to our partner on this report,Oliver Wyman,an
12、d our partners in the e-HKD Pilot Programme,including Hong Kong Cyberport Management Company Limited,The Chinese University of Hong Kong,and FORMS Syntron Information(HK)Ltd.Ronald FungPartner,Digital and Financial Services Practices,Oliver WymanCentral bank digital currencies(CBDCs)come with exciti
13、ng potential,yet many industry practitioners are still in the exploration stage,with hesitations.To contribute to the responsible community in exploring the future of money,Oliver Wyman has been working collaboratively with policymakers,traditional financial institutions,disruptors and civic society
14、 in thought-leadership and various pilot endeavours.Through this joint report,Hang Seng and Oliver Wyman aim to crystallise the various characteristics and benefits of an e-HKD.Additionally,this report identifies the key enablers required to unlock the future potential of e-HKD.We believe this repor
15、t can facilitate the industry in gaining a better understanding and confidence to embark on this exploration together,creating much-needed collaboration between the private and public sectors.Oliver Wyman5Envisioning Programmable Payments In Hong KongContentsExecutive summary 61.Potential value of e
16、-HKD 81.1 Rationale for piloting CBDCs 81.2 Value of a CBDC to Hong Kong 92.A real-life experiment 122.1 Use cases design and rationale 122.2 Feedback from the pilot and its implications 162.3 Reflection on enabling e-HKDs future success 203.From vision to operation 213.1 Participation models 223.2
17、Programmability setup and ownership 263.3 Innovation-friendliness of e-HKD platform 284.Whats next for stakeholders 30 Oliver Wyman6Envisioning Programmable Payments In Hong KongExecutive summaryCentral bank digital currencies(CBDCs)have gained widespread interest from around the world.A CBDC is a d
18、igital form of a fiat currency that is issued by a central banking institution.Some countries,like China and the Bahamas,are running advanced pilots(e.g.,e-CNY in China and Sand Dollar in Bahamas),while others,such as the United Kingdom and Europe,are in the design stage(e.g.,digital pound and digit
19、al euro).We see CBDCs come with exciting potentials it may unlock additional economic value by facilitating new types of transactions and enhancing their efficiency and transparency.In Hong Kong,the Hong Kong Monetary Authority(HKMA)has been researching CBDCs as part of its“Fintech 2025”strategy.As
20、part of the HKMAs three-rail approach in paving the way for the potential implementation of an e-HKD,being a retail CBDC in Hong Kong,the HKMA launched the e-HKD Pilot Programme in November 2022 to explore commercially viable use cases for an e-HKD in collaboration with the industry.Sixteen particip
21、ants,including Hang Seng Bank(Hang Seng),were involved in Phase 1 of the programme,which commenced in May 2023.Hang Seng collaborated with FORMS HK to develop a hypothetical e-HKD e-Wallet prototype.The prototype was used to test the effectiveness of a hypothetical e-HKD to streamline the use cases
22、of government grant disbursement,merchant reward programme,and Peer-to-Peer(P2P)transfer.Drawing from the feedback gained during the pilot,we observe three strategic implications:An e-HKD has the potential to enable wider adoption of retail payments.With increasingly various types of retail business
23、 models,the demand for conditional payments has become ubiquitous,such as long-term service subscriptions that necessitate payment over a period,and peer-to-peer marketplaces where payments are required upon the receipt of goods.As a retail CBDC,an e-HKD could be linked to various digital payment me
24、thods,allowing conditional payments to be applied regardless of the payment methods being selected by the users.An e-HKD could empower small businesses in using digital payment&programmability features.Due to ingrained business norms and the lack of technology capabilities of many small businesses,t
25、hey tend to embrace digitalisation in the retail commercial world at a slower pace.An e-HKD has the potential to reduce technology barriers and enable small businesses to set specific conditions for transactions,e.g.,customised rewards and payments in instalments.Oliver Wyman7Envisioning Programmabl
26、e Payments In Hong Kong Clear incentives will be required to drive adoption for both individuals and businesses.Should an e-HKD be launched in the future,the pilot study has shown that certain criteria have to be met to drive adoption.For individuals,the adoption could be driven by improved user exp
27、erience and certain level of payment incentives.Conversely,for merchants and government organisations,the main incentives are cost efficiency and ease of implementation.Based on the pilot experiences,there are three key enablers which should be addressed in order to realise the full potential of an
28、e-HKD,should it be launched in the future:Collaborative participation model:Private sector participation is not only critical for continuing experiment of e-HKD in the current stage,but also key for future implementation and promotion if an e-HKD is to be launched.Therefore,a participation model tha
29、t defines who and to what extent private sector could participate would become a key design question.A model that allows active participation from the private sector could encourage competition among intermediaries,leading to customer-oriented innovation,improved services,and lower price.Accessible
30、and user-friendly programmability features:To incentivise small merchants and government organisations to adopt e-HKD,we view that the biggest challenges to be addressed are 1)the conditions that need to be made available when deploying transactions with conditional payments,and 2)the ease of this d
31、eployment process.However,providing innovative programmability features on a large scale might also cause implementation issues.Therefore,the offering of programmability features should be designed with considerations of user experiences,system performance,and risk management.An innovation-friendly
32、platform:This refers to a platform that is easy for eligible intermediaries to innovate and implement use cases.Based on Hang Sengs experience in the pilot,a private-blockchain-based platform with APIs and interoperable standards to connect different intermediaries would appear to be ideal to foster
33、 innovation.We acknowledge that certain non-technical factors such as ingrained business norms and preferences may not be necessarily solved by an e-HKD and,hence,can influence e-HKDs uptake should it be issued.With that said,the pilot proves that e-HKD could have the potential to deliver other subs
34、tantial and equally important benefits to individuals,merchants,and government organisations.These valuable insights would not only hold significance for Hong Kong but also provide some reference for other advanced economies currently exploring the implementation of retail CBDCs.Now is an opportune
35、moment for collaboration between the public and private sectors to deepen the examination of the key benefits that an e-HKD could bring to Hong Kong,and to set out necessary frameworks and architectures to fully realise the potential benefits.Oliver Wyman8Envisioning Programmable Payments In Hong Ko
36、ng1 Potential value of e-HKD1 Bank for International Settlements,July 2023,Making headway Results of the 2022 BIS survey on central bank digital currencies and crypto.2 International Monetary Fund,March 2023,Nigeria Fostering Financial Inclusion through Digital Financial Services.Central bank digita
37、l currencies(CBDCs)are gaining traction in the digital financial services market as a form of digital money.In 2022,a survey by Bank for International Settlement(BIS)revealed that 93%of the surveyed central banking institutions had launched either retail CBDC projects or both retail and wholesale CB
38、DC projects,indicating widespread interest1.Hong Kong,for example,has completed Phase 1 of the e-HKD Pilot Programme in 2023 to explore the use cases and unique value of issuing its own retail CBDC.Despite the experiments and projects,many central banking institutions remain undecided on the path ah
39、ead.This section will review the motivations of central banking institutions in piloting a retail CBDC,and discuss the value of retail CBDCs in advanced economies like Hong Kong.1.1 Rationale for piloting CBDCsThe same survey by BIS has shown that emerging economies are leading in the development of
40、 CBDCs compared to advanced economies,especially for retail CBDCs.Notably,all current live retail CBDCs are issued in emerging economies.For instance,Nigeria launched eNaria in 2021 to enhance financial inclusion as one of the motivations,leveraging the countrys high mobile phone penetration rate of
41、 approximately 80%2.In emerging economies,retail CBDCs have the high potential to improve financial inclusion and payment efficiency.Whilst in advanced economies,the aforementioned pain points are nearly well-addressed due to well-banked population and developed digital payment ecosystems.As a resul
42、t,many advanced economies are still exploring the value of retail CBDCs,focusing on enhancing customer experience,improving payment efficiency,ensuring safety,and promoting financial stability.Oliver Wyman9Envisioning Programmable Payments In Hong KongFor example,the European Central Bank(ECB)is loo
43、king into the possible issuance of a digital euro to strengthen its role in the payment market,which could“help reduce Europes dependence on private,non-European payment providers”3.It was explored that more“pan-European payment innovations”could be fostered and more healthy competition in the Europ
44、ean payment landscape could be introduced,showcasing the diverse capabilities and solutions offered by CBDCs.1.2 Value of a CBDC to Hong KongHong Kong,a prominent financial hub in Asia,boasts a highly sophisticated payment market,with 91%digital payment adoption rate4 and HKD 350 billion retail sale
45、s in a year5.However,despite its accessibility and convenience,many merchants,especially the small-and-medium-sized ones,still experience pain points such as high cost and operational inefficiency to customise payments on their purposes.Although some digital payment methods are able to provide trans
46、action record and simple reward options for merchants,some small-and-medium-sized merchants may still hesitate to adopt these new technologies due to entrenched business practices and limited operational and technological resources to analyse customer data and create personalised reward programmes.F
47、urthermore,small and medium-sized merchants often face the challenge of having to select one or several payment e-wallets to implement such reward programmes,given there is a lack of existing solution that provides customers with access to all merchants,which can be less efficient.An e-HKD,a digital
48、 version of the Hong Kong dollar that is being examined in the pilot,could potentially address the gap by embedding the potential features of programmability,traceability,and interoperability.Programmability is defined as the ability to set conditions for money or payments for specific purposes.For
49、example,a merchant could programme a customised discount into transactions based on certain time and counterparty criteria.This could not only streamline the process of merchants adopting conditional payments and reward programmes,but also lower the technical and operational barrier of less tech-sav
50、vy organisations(such as small-and-medium-sized merchants)to embrace a new payment method,bearing any resistance they may have towards these new methods as a result of pre-existing notions or longstanding norms.3 European Central Bank,October 2023,FAQ on a digital euro.4 The Hong Kong Polytechnic Un
51、iversity,April 2023,PolyU-Asklora Fintech Adoption Index(FAI).5 Hong Kong Census and Statistics Department,2022,Total Retail Sales.Oliver Wyman10Envisioning Programmable Payments In Hong Kong Traceability refers to accurate documentation and automatic tracking of e-HKD movements since the time of is
52、suance.It could enable the above merchants and organisations to track the performance of implemented reward programmes irrespective of the payment channel being utilised,and hence make more informed decisions with better understanding of the market.Interoperability refers to the seamless and efficie
53、nt exchange of information,transaction processing,and communication across systems,such as among the existing payment systems.Depending on the design of e-HKD infrastructure,an e-HKD could potentially offer an interoperable solution applicable to the entire payment ecosystem and accessible to all in
54、dividuals,merchants and government organisations whilst not cannibalising the existing market.Although some of these features may as well be achievable in the existing payment channels(e.g.,customised reward could be implemented in some digital payment channels),an e-HKD could potentially and unique
55、ly combine these features in one single digital money,which makes it exceptionally versatile and easy to drive new payment innovations and create additional commercial values.Exhibit 1:Potential features and benefits of an e-HKDAchievable in one single digital money potential e-HKDInteroperablee-HKD
56、 could be interoperable with existing payment systems and connect individuals,merchants,government organisations in one ecosystemProgrammablee-HKD could support various forms of conditional payments in just a few clicksTraceablee-HKD could track real-time fund usage for eligible parties through user
57、-friendly wallets/interfaces and allow data analytics Oliver Wyman11Envisioning Programmable Payments In Hong KongThe Hong Kong payment ecosystem has evolved through several stages to become as advanced and user-friendly as it is today.This journey includes the evolution from its initial stage of ca
58、sh-based payments to“Payment 1.0”,i.e.,cashless payments with the introduction of Octopus cards and credit cards,as well as the upgrade to“Payment 2.0”,which entails contactless payments such as online digital payments.With more players entering the market,the competition has also incubated value-ad
59、ded services beyond pure payment,such as exclusive reward programme and financing services provided and controlled by the payment channels.Each of these stages has introduced new solutions to provide additional benefits to the users whilst not excluding the pre-existing solutions to serve diversifie
60、d client needs.With the uniquely combined features of a potential e-HKD,it has the chance to drive further evolution of the payment ecosystem from stage 2.0 to 3.0.Programmability,as being tested in multiple use cases in Phase 1 of the e-HKD Pilot Programme,could empower the less tech-savvy institut
61、ions and merchants to design and control their own payment conditions as needed,without depending on specific payment channels or requiring additional technology resources for implementation.Exhibit 2:Evolution of Hong Kong payment landscapeInitial stagePayment 1.0Payment 2.0Payment 3.0Cashless paym
62、entContactless paymentValue-added services driven by payment channel operatorsProgrammable payments driven by merchants or government organisations,embedding traceability and interoperability Cash-based payment Oliver Wyman12Envisioning Programmable Payments In Hong Kong2 A real-life experimentTo ta
63、ke deep dives into potential use cases,and implementation and design issues relating to an e-HKD,the HKMA commenced Phase 1 of e-HKD Pilot Programme in May 2023,with Hang Seng as one of the participating firms.Recognising programmability as one of the key potential features of e-HKD,Hang Seng propos
64、ed two use cases and one supplementary use case,all of which fell under the programmable payments category.To test the three use cases,Hang Seng developed a hypothetical e-HKD e-wallet with assistance from a Fintech company,FORMS HK.This prototype utilised a private blockchain to facilitate the issu
65、ance of hypothetical e-HKD-supported tokens with specific payment conditions,enabling government grant disbursement(Government to Customers,or G2C)and merchant reward programme(Business to Customers,or B2C).In order to ensure a comprehensive coverage of retail payment scenarios,P2P transfer was also
66、 explored and enabled to supplement the first two use cases.The remaining part of this section provides an overview of each of the three use cases and summarised the feedback collected from the pilot participants.2.1 Use cases design and rationaleHang Sengs pilot encompassed three use cases,namely g
67、overnment grant disbursement,merchant reward programme,and P2P transfer.Oliver Wyman13Envisioning Programmable Payments In Hong KongUSE CASE 1Government grant disbursementToday,the subsidy disbursement and collection process are notably long and manual for both the government organisations and benef
68、iciaries(i.e.,the recipients).From the governments perspective,the distribution of government grant still consists of many manual processes,including handling supporting documents,notifying approval and disbursement status,conducting the subsidy transfer through cheques and other means.Although some
69、 of the processes are deliberately designed to embed extra control on the correct disbursement,the general perception of the overall disbursement process is that it can be both resources-consuming and time-consuming,as well as creating unpleasant user experiences for the beneficiaries,such as checki
70、ng across multiple systems to reconcile the subsidy application and cashflow information.Furthermore,as the subsidies are managed by the beneficiaries in various bank accounts and digital wallets.It is extremely challenging to monitor the usage of disbursed subsidies,creating the potential for misus
71、e.As described in Exhibit 3,different potential features of an e-HKD could address the preceding issues within government grant disbursement.For instance,the programmability nature of e-HKD can enable automation in governments notifications to beneficiaries and fund disbursement once the eligibility
72、 of the beneficiaries is confirmed.Another feature of e-HKD,i.e.,atomic settlement,could guarantee beneficiaries to receive subsidies instantly without any delay.Finally,the traceability could allow real-time tracking of fund usage for administrative purposes as long as it is kept as an e-HKD.Exhibi
73、t 3:Government grant disbursement process current vs in e-HKD pilotCurrentIn Hang Sengs e-HKD pilot use case designEnabled by potential e-HKD featuresApplication and approvalVaryingVaryingNANotification for approval resultsManual and lengthy process Government notifies beneficiaries through mail,ema
74、il and other channelsAutomatic and speedy Government notifies beneficiaries via hypothetical e-HKD wallet once the approval is obtainedProgrammabilityFund disbursementTime-consuming In some cases,beneficiaries receive cheques andqueue atbranch for handlingFast and ring-fenced fund Beneficiaries rece
75、ive subsidies instantly,where subsidies are ring-fenced for eligible usageAtomic settlement and programmabilityMonitoringManual and lengthy process Government extracts data from different sources with time lagAutomatic and instant monitoring Government has access to real-time subsidy usage data on t
76、he administrative portalProgrammability with traceability1234 Oliver Wyman14Envisioning Programmable Payments In Hong KongAs such,the manual work of government staff could be largely streamlined and automated.They would also be empowered to monitor the usage of the subsidy,the data collected from wh
77、ich could benefit the design of future subsidy programme.For the beneficiaries,tracking the disbursement progress could be much easier and more instant.They might only need to tap a few times on the phone to see the disbursement,instead of navigating through multiple applications.Taking FY2023-24 as
78、 an example the Hong Kong government is expected to spend HKD 129 billion on social welfare(e.g.,Old Age Living Allowance,Comprehensive Social Security Assistance,Disability Allowance)6.This amount may continue to grow in the future with economic growth and progression of the society.With the infras
79、tructure in place,an e-HKD has the potential to facilitate future government subsidies of varying scale and criteria,resulting in efficiency savings for the government and benefiting millions of recipients.USE CASE 2Merchant reward programmeOn the other hand,providing customised reward to facilitate
80、 business expansion and customer traction has been challenging for merchants.As shared by a food and beverage operator that participated in the pilot,small-and-medium-sized merchants are often constrained by limited capacity and capability to manage reward programmes.An e-HKD emerges as a potential
81、solution to address these challenges.Its programmability empowers merchants to easily design the vouchers so that they can be automatically disbursed when a customers spending fulfils predefined conditions.For the individual users,the e-HKD platform could provide a unified system for streamlined man
82、agement of diverse reward vouchers.Upon the redemption of vouchers,e-HKD leverages programmability to conduct automated checks on redemption conditions and facilitate atomic settlement to close the transaction.6 Hong Kong 2023-24 Budget.The current digital payment means are too costly.Also,we do not
83、 have regular rewards/reward programmes since we find it hard to indentify the right customers to distribute rewards.A food and beverage operator Oliver Wyman15Envisioning Programmable Payments In Hong KongIn Hong Kongs bustling retail landscape,with over 63,000 retail outlets7,catering to personali
84、sed rewards for over 4 million potential users8 could enhance customer loyalty,engagement,as well as overall customer experience.Exhibit 4:Merchant reward programme current vs in e-HKD pilotCurrentIn Hang Sengs e-HKD pilot use case designEnabled by potential e-HKD features DesignManual work and leng
85、thy process Merchants design terms and conditions and layoutAutomatic,fast and low-cost Merchants set customised conditions and distribute the vouchers via the administrative portalProgrammabilityDistributionExpensive Merchants print and distributevouchersStorageDifficult to manage Customers receive
86、 different formats ofrewards with no customisationEase of management Customers receive vouchers instantly andmanage them on a single platformProgrammabilityRedemptionTime-consuming Customers queue at shops to use thevouchersVerificationManual work Merchants manually verify the terms andconditions of
87、 vouchersAutomatic,fast and low-cost Merchants verify and settle the vouchers without manual checkingAtomic settlement and programmabilityReconciliationManual work Merchants manually reconcile andsettle transactions with banksSupplementary use case:P2P TransferSimilar to merchant reward programmes,P
88、2P transfers could also embed programmability and traceability with an e-HKD.In the pilot,Hang Seng enabled conditional and traceable P2P transfer so that the payers could customise the prerequisites for the fund to be further used and track the fund utilisation.It could enhance the payers control a
89、nd visibility on the fund usage,which is valuable to people engaging services such as errand services and purchasing agents.7 Hong Kong Retail Management Associations,based on the disclosure as of 15 November 2023.8 Referring to Hong Kong population who are aged between 15-64 and own at least 1 smar
90、tphone;Hong Kong Census and Statistics Department,May 2023,Thematic Household Survey Report No.77.123546 Oliver Wyman16Envisioning Programmable Payments In Hong KongThis use case supplements the aforementioned two use cases and allows the pilot e-wallet to cover all retail payment scenarios comprehe
91、nsively.2.2 Feedback from the pilot and its implicationsUsing the hypothetical e-HKD e-wallet prototype(Hang Seng e-wallet),Hang Seng successfully completed four pilot tests involving 176 individual participants,together with seven merchants and one government organisation.A total of 1,296 transacti
92、ons and transfers,including issuance of coupons from government organisation and merchants,as well as P2P transfers were performed during these pilots.To garner valuable insights from the pilot,feedback from the participating individuals,merchants and government organisation were collected through s
93、urvey and interviews.The results show a high level of satisfaction in processing e-HKD transactions.After trying the Hang Seng e-wallet,the participants also recognised traceability and programmability to be key strengths of e-HKD.Small merchants,in particular,have expressed enthusiasm in digitising
94、 their payment collection processes and streamlining their operations.of respondents expressed a positive attitude towards use of Hang Seng e-walletOverall satisfaction from the participants81%75%of respondents are willing to recommend e-HKD to othersRecognition on the potential features of an e-HKD
95、87%83%TraceabilityProgrammabilityof respondents found that the wallets ability to clearly date and categorise transaction data either met or exceeded their expectationsof respondents reported that wallets conditional payment feature either met or exceeded their expectationsA testament to the user-fr
96、iendly design and efficient functionality of the Hang Seng e-walletExemplifies the positive impact of flexibility and additional security from e-HKD and Hang Seng e-wallet Oliver Wyman17Envisioning Programmable Payments In Hong KongHowever,while the participants mostly welcome new payment options,th
97、ey also acknowledged that Hong Kong has a generally mature payment ecosystem,and it will require more to convince users to adopt a new payment means.Exploring the motivations in adopting a new payment method,a large proportion of survey respondents highly valued security and privacy,which we believe
98、 as the“basic requirement”for users to consider adopting a new payment method.When the“basic requirement”is met,users would further pay attention to value-added services and financial incentives which might ultimately convert their willingness to try into actual adoption.Individual users top motivat
99、ing factors in adopting a new payment methodSecurity and privacy Value-added services Incentives/rewardsof respondents indicated secure transactions and data privacy as the top factor for trying a new payment method 70%of respondents indicated whether they could use different services(e.g.,retail re
100、ward,bank account)on a single platform would be a critical factor53%of respondents indicated the ability to earn personalised rewards or incentives as a critical factor44%Individual users top concerns towards e-HKD36%33%Limited merchant acceptanceSafety and securityof respondents raised this as thei
101、r top concern,expressing their worry regarding the lack of usability and convenience that comes with e-HKD not being widely acceptedof respondents indicated this as the top concern.They are concerned with the security of their financial transactions and personal informationShall an e-HKD be implemen
102、ted,for merchants and government organisations,low cost and user-friendliness were identified to be the two major enablers for their adoption.Merchants and government organisations top motivating factors in adopting e-HKDLow costUser-friendlinessExisting market players in the payment industry have b
103、een lowering the merchant fees,and merchants expect new technologies to maintain,if not lower,these fees,as they directly impact the profitability of their businessesElevated customer experience with streamlined operational process and easy-to-use application can highly motivate merchants to adopt n
104、ew technology Oliver Wyman18Envisioning Programmable Payments In Hong KongWe try to keep the operation simple and hence we would only be using 1-2 payment means with high operational speed and low fees.It will also help digitalise our operation for small businesses like us.A food and beverage operat
105、orI think e-HKD is very suitable for large-scale subsidy programme(with 1k+beneficiaries).It could help optimise and streamline the operational process,and thus cut time and cost.With e-HKD,we could potentially save 25%of the time used in payment approval and verification process.A government organi
106、sation“Oliver Wyman19Envisioning Programmable Payments In Hong KongIn conclusion,to ensure that there is a meaningful uptake of an e-HKD if it is to be launched,the pilot feedback suggest that the following criteria have to be fulfilled for different end users.For individuals,better user experience
107、is one of the key motivations.It means that future services enabled by e-HKD should be able to offer impressive or even unprecedented experiences to attract attention and usage.Additionally,to echo the survey results,certain level of financial reward or ring-fenced subsidy could also effectively inc
108、entivise rapid and widespread adoption.For merchants and government organisations,cost would be crucial for the decision on adoption.The transaction cost would likely be an important consideration for merchants,and an equal or lower transaction cost compared to existing payment methods may be necess
109、ary to drive adoption of an e-HKD.In addition,the e-HKD application and POS machines have to support easy and intuitive user experiences for both basic functionality(such as payment acceptance)and more advanced processes(such as condition programming).It is also ideally integrated with the existing
110、workflows in merchants and government organisations to make adoption easier.Exhibit 5:Essential criteria for end users to adopt an e-HKDBetter user experienceFun or unprecedented functions/user experiences IndividualsFinancial rewardsCertain amount of financial reward or ring-fenced subsidy for earl
111、y adopters and recommendations12Cost savingsTransaction cost equal or even lower than the current payment methodsMerchants and government organisationsEase of implementationEasy and intuitive user experience to adopt and design desired conditions,seamless integration with existing workflow12 Oliver
112、Wyman20Envisioning Programmable Payments In Hong Kong2.3 Reflection on enabling e-HKDs future successTo fulfil the aforementioned criteria,we have identified three key enablers that need to be in place for the design of an e-HKD.1.Collaborative participation modelThe involvement of intermediaries is
113、 key to facilitate the adoption of e-HKD if it launches,from use case design and customer outreach to customer education.Competition among intermediaries would drive customer-centric innovation and benefit end-users with improved services and lower prices.For example,intermediaries could provide add
114、itional benefits or rewards to customers when they pay with e-HKD.In light of this,it is essential to establish a participation model that provides fair opportunities for market participants to achieve commercial value,such as revenue uplift from new services and customers and operational cost optim
115、isation through streamlined KYC processes.2.Accessible and user-friendly programmability featuresA key motivation from merchants and government organisations are the ease of implementation.This entails not only a user-friendly payment gateway infrastructure but also comprehensible and manageable pro
116、grammability functions,ensuring that the cost and efforts required to adopt these functions are minimal and straightforward for small-and-medium-sized players.In other words,the programmability features should firstly be accessible,intuitive and easy to use from design perspective(e.g.,providing a r
117、epository of smart contract templates for common business activities).Additionally,the infrastructure of programmability should consider proper governance and legal implications,such as potential disputes regarding the effectiveness of programmed payments.3.An innovation-friendly platformA flexible
118、and agile platform is crucial for intermediaries to experiment with different use cases of e-HKD and create differentiated solutions.This lowers the threshold for intermediaries to innovate new service propositions and generate additional revenue streams.Eventually,this would benefit the end-users w
119、ith better user experiences and potentially more financial incentives to drive adoption.The results and findings mentioned above are derived from Hang Sengs e-HKD pilot,which has certain limitations.It is important to note that the pilot was conducted on a small scale and may undergo changes during
120、full-scale implementation with a larger number of participants,integration with government or merchant systems,and a longer duration etc.Furthermore,the pilot setup does not represent the final design of e-HKD,should it be launched.Despite these considerations,the pilot findings remain valuable in i
121、dentifying the key benefits and enablers of e-HKD,providing insights for the direction of the next phase of the e-HKD Pilot Programme.Oliver Wyman21Envisioning Programmable Payments In Hong Kong3 From vision to operationAs an e-HKD is still in the pilot stage of evaluating its commercial viability,m
122、any design questions on the technology,legal and risk management framework,commercial business model are yet to be explored and researched,which are crucial factors in assessing the feasibility of launching an e-HKD.With the three key enablers being identified from Hang Sengs experiences in HKMAs Ph
123、ase 1 pilot,this section will primarily focus on the design considerations related to these enablers.It aims to provide insights into the technical aspects of an e-HKD rather than delving into the legal and risk management.Specifically,this section will consider:Participation models:What intermediar
124、ies should participate in the hypothetical e-HKD ecosystem?What roles should they play(such as issuance,circulation,service provision)?How to ensure fair competition in the market to foster innovation?Programmability setup and ownership:Whether programmable payment or programmable money is more idea
125、l for the launch of e-HKD?Who could be given the access to programmability?How should access to programmability features be managed?Innovation-friendliness of e-HKD platform:What features should be in place to encourage market participation and innovation?In the following,we will review the potentia
126、l design options and draw on the experiences in pilot programme to uncover the pros and cons of the designs.Oliver Wyman22Envisioning Programmable Payments In Hong Kong3.1 Participation modelsThe HKMA has been looking into various participation models as part of its effort in Project e-HKD and in th
127、e collaboration with BIS Innovation Hub under Project Aurum and Project Sela.As the outcome of initial research,Project e-HKD proposed“two-tier architecture”due to its advantages in privacy-preserving transaction traceability and cross-ledger synchronisation of decoupled ledgers9.The“two-tier archit
128、ecture”consists of two layers:a wholesale system for the central banking institutions to issue and redeem CBDC,and a retail system for commercial banks to distribute and circulate either retail CBDC or CBDC-backed e-money.This is in contrast to a“single-layer architecture”where a central banking ins
129、titution directly issues and distributes CBDC to end users.This report will continue to assume“two-tier architecture”in considering the participation model.In addition to the benefits mentioned in Project e-HKD and Project Aurum reports,the pilot results have also demonstrated the importance of inte
130、rmediary involvement in delivering the benefits of an e-HKD.Compared to the central banking institutions,the intermediaries,such as commercial banks and Stored Value Facilities(SVFs),are much closer to the end users during daily interactions.Therefore,the intermediaries could understand the end user
131、s latest pain points and therefore design targeted applications to enhance user experience.Given the importance of intermediary involvement,three fundamental questions about the participation model have surfaced.1.What role could the intermediaries play?2.What kind of intermediaries may be allowed t
132、o play these roles?3.How to incentivise participation and competition to drive innovation?9 Hong Kong Monetary Authority,October 2021,e-HKD:A Technical Perspective.Oliver Wyman23Envisioning Programmable Payments In Hong KongQuestion 1:What role could the intermediaries play?10 In addition to the two
133、 types of roles,there may be other roles possible to be taken by intermediaries in a retail CBDC infrastructure while not extensively explored in the pilot.11 Hong Kong Monetary Authority,October 2021,e-HKD:A Technical Perspective.Based on Hang Sengs experience in Phase 1 of the pilot,there are thre
134、e major roles10 that could be taken by the intermediaries as described below.CBDC distribution and management:At a minimum,intermediaries role could be connecting individuals to the CBDC system,which is managed by the central banking institution.And,more extensively,the intermediaries could operate
135、parts of the CBDC infrastructure.For example,Project e-HKD discussed a CBDC-backed e-money model11 as one of the three potential“two-tier architecture”options.The intermediaries could issue CBDC-backed tokens for retail usage and,hence,need to operate the infrastructure for the token issuance.This w
136、ould give issuing banks more incentives to drive innovation in the CBDC system and achieve commercial value by monetising from increasing transaction volume.Exhibit 6:Illustrative relationship between central bank,intermediaries,and end-users in CBDC-backed e-money modelCentral bankIntermediaries(e.
137、g.,commercial banks)End-users(e.g.,customers and merchants)Issue CBDCReserve CBDCIssue CBDCReserve CBDCIssue Bank As stablecoinIssue Bank Bs stablecoinABBank ABank BAB Wallet and payment services:This role is to provide customer-facing services include user interfaces,value-added functionality,custo
138、mer support,merchant services,payment gateways,and potentially other forms of programmability.Account and transaction KYC:This role is to ensure Anti-Money Laundering(“AML”),Counter-Financing of Terrorism(“CTF”),fraud and other compliance watchpoints are adequately checked and cleared for account op
139、ening and transaction processing.However,the substance of this role may vary extensively based on the design of CBDC infrastructure,especially whether a CBDC has anonymity and whether the infrastructure is distributed ledger technology(DLT)based.If a CBDC is not entirely anonymous and the infrastruc
140、ture is built on blockchain,there is potential that only a few intermediaries have to do the KYC Oliver Wyman24Envisioning Programmable Payments In Hong Kongchecks and the results could be shared to other market participants without disclosing any other information.This could reduce duplicated effor
141、ts across entities and therefore save costs for the market as a whole.Question 2:What kind of intermediaries may be allowed to play these roles?Depending on the nature of the roles being permitted,the requirements on the participating intermediaries would also vary.CBDC distribution and management:R
142、egardless of the extent of the CBDC distribution and management roles that intermediaries may be permitted to play,it will necessitate the participating players to possess sufficient technological,operational,and risk management capabilities,as well as to allocate appropriate resources.Using the CBD
143、C-backed e-money model as an example,the infrastructure of issuing banks should be capable of connecting with the wholesale CBDC ledger and enabling efficient processing of potentially high-volume retail transactions at the same time.As such,only intermediaries with the aforementioned capabilities a
144、nd resources(such as large banking institutions)should be allowed to play these roles,and proper governance on assessing,monitoring and reviewing these conditions would be essential.Wallet and payment services:This is the role with the biggest potential to drive innovation.Not only should commercial
145、 banks be encouraged to play this role,but customer-facing FinTech companies such as SVFs should also be welcomed.This would allow them to adapt their services to support the delivery of CBDC,foster healthy competition,and provide innovative solutions for the benefit of society as a whole.Account an
146、d transaction KYC:If a CBDC is not designed to provide full anonymity,all participating intermediaries would have KYC responsibilities,which is similar to the current banking and digital payment systems.Therefore,only intermediaries that possess sufficient KYC and AML capabilities could be considere
147、d in providing account management and transaction services.However,adopting blockchain technology for an e-HKD infrastructure could potentially streamline these efforts by enabling different entities to access and verify KYC data.Instead of each institution conducting independent KYC checks,they can
148、 rely on the verified data stored on the blockchain,reducing duplication of efforts.Additionally,under proper risk management governance,larger intermediaries with more established KYC capabilities and more extensive client data may be able to outsource these capabilities to other players.This could
149、 result in cost savings for the industry and create new source of revenue for the larger players.Oliver Wyman25Envisioning Programmable Payments In Hong KongQuestion 3:How to incentivise participation and competition to drive innovation?12 Although this implies additional cost for the merchants,the
150、services would create additional value for merchants in attracting and serving the customers.Similar to the case of credit cards,the fees paid by merchants could potentially fund the operation of the reward programme as well as provide incentives to individuals for wider adoption.13 Settlement of to
151、kenised asset is one of the use cases in Phase 1 of e-HKD Pilot Programme,which explores use of tokenised real estate assets for granting a home equity line of credit as well as tokenisation of pledging rights to an asset.Hong Kong Monetary Authority,October 2023,e-HKD Pilot Programme Phase 1 Report
152、.Ultimately,the incentive of intermediaries participation depends on the commercial value that could be generated from the potential e-HKD ecosystem,which usually lies in new revenue-generating business opportunities and cost savings.New revenue-generating business opportunities:It could come from n
153、ew innovative propositions for certain customer segment and thus creating new revenue streams,such as charging merchants to use conditional reward functionality on transaction or subscription basis12.More extensively,if the future e-HKD could facilitate transactions of virtual assets(e.g.,virtual cu
154、rrencies or digital collectibles)or tokenised assets(e.g.,tokenised bonds)13,the intermediaries may be able to provide related products and services to capture the unprecedented market demand,thus potentially charging end-users based on transaction volume or amount.Advanced intermediaries could even
155、 output their institutional capabilities to enable smaller players in pursuing e-HKD opportunities,such as account KYC.Intermediaries could potentially charge other intermediaries on a pay-per-use model.Cost savings:For example,it would be easier for banks and other wallet operators to trace the tra
156、nsactions and analyse the transaction patterns in order to capture fraud more accurately.The efforts required to reconcile information across multiple intermediaries would be significantly eliminated.However,to enable such commercial value for intermediaries,the governance on data accessibility woul
157、d be key,which defines the scope of data accessible and utilisable to the intermediaries.Expanding the data accessibility could empower intermediaries to pursue more innovative initiatives.However,this approach also raises concerns regarding data privacy and cybersecurity,which holds paramount signi
158、ficance for individual users to consider adoption(as mentioned in Section 2.2).Conversely,imposing strict limitations on data accessibility can safeguard data privacy but may hinder the commercial viability of e-HKD business for intermediaries as well as the investigation into potential fraud and ot
159、her financial crimes.Meanwhile,it should also be watched out for any exclusive data accessibility,which could become a“double-edged sword”for the entirety of the market.On one hand,it provides a competitive advantage to the data recipients,and thus fostering innovation;but on the other hand,it may e
160、xacerbate the disparity among market participants.Oliver Wyman26Envisioning Programmable Payments In Hong Kong3.2 Programmability setup and ownershipAs mentioned in earlier sections,programmability is at the heart of the benefits brought by a potential e-HKD.However,the implementation of programmabi
161、lity still awaits two key design questions to be decided:Whether programmability is embedded in the payment or the digital money?What control mechanism is required to guardrail implementation of programmability in a large scale?Question 1:Whether programmability is embedded in the payment or the dig
162、ital money?“Programmable money”is a concept where predefined conditions are embedded into the money regardless of who it is transferred to.In contrast,programmable payments could set conditions to trigger or hold the payment.But the transferred money still represents a form of value without restrict
163、ions on how the money can be spent after the payment.Individuals possessing the money have the freedom to utilise the money for any purpose desired.It is important to discuss and differentiate the two concepts as the nature of programmability can have implications on both operational aspects and pol
164、icy considerations.In Phase 1 of the e-HKD Pilot Programme,programmability is used as a key component in a number of use cases which could have much upside should an e-HKD be launched,such as loyalty programmes,retail escrow products,and fund investments with atomic settlement.It shows that programm
165、able payments could already meet much of the rising demand for programmability without the need to push for programmable money.The consideration of using programmable money mainly lies in the operational design and the issue of public perception.With programmability inherently built in,programmable
166、money could enable conditional transactions irrespective of the transaction service providers,like digital wallets or intermediaries,reducing the complexity to implement programmability.But in the meantime,programmable money may cause concerns on the singleness of money,which refers to the concept o
167、f having a unified and consistent form of currency within an economic system.For instance,if an e-HKD is subject to restrictions on its usage or has an expiration date,it may be perceived as having less value compared to other forms of HKD,undermining its status as a universally accepted form of cur
168、rency.In light of these potential concerns,central banking institutions exploring retail CBDCs have shown to be more reserved about programmable money.For example,ECB stated that a digital euro will“never be a programmable money”that has limitations on where,when or to who people can pay with it.The
169、 HKMA has not yet made a policy decision on whether a potential e-HKD should be programmable and it would depend on a wide range of factors,such as the actual progress of the work under Rail 1 and Rail 2,and the pace of relevant market development,both local and international.Oliver Wyman27Envisioni
170、ng Programmable Payments In Hong KongExhibit 7:Programmable money and programmable paymentProgrammable paymentProgrammable moneyConditions embedded to trigger or hold payment of money Digital moneyConditioned embedded in moneyDigital moneyQuestion 2:What control mechanism is required to guardrail im
171、plementation of programmability in a large scale?As mentioned in Section 1,one of the major benefits that an e-HKD could potentially bring is to empower the small-and-medium-sized and less tech-savvy institutions to enjoy the programmability and digitisation.As such,the implementation of programmabi
172、lity in a large scale would be one of the prerequisites.To assess the feasibility of potential large-scale implementation,the following aspects have to be carefully considered with a holistic consideration of protecting fair market competition,room for innovation,customer data protection,cybersecuri
173、ty,etc.Who could define the types of conditions that are allowed to be used?Should all of the wallet operators or only selected intermediaries define the eligible condition types?How can innovation and competition be continuously and consistently fostered?Who should bear the cost of development and
174、operation fees?Where would the programmability conditions be implemented?Should it be hosted in the CBDC infrastructure or implemented through APIs to the wallet operators?The considerations on network resources and transaction processing speed should be taken into account.Who could access to the pr
175、ogrammability functions?Do users(such as merchants and government organisations)need to fulfil certain requirements to implement the desired conditions in their transactions and money transfers?Do any intermediaries hold any responsibility to control or monitor the use of programmability in a CBDC i
176、nfrastructure?Oliver Wyman28Envisioning Programmable Payments In Hong Kong3.3 Innovation-friendliness of e-HKD platformAn innovation-friendly e-HKD platform is crucial for enabling market participants to explore new use cases and provide services to end-users.Factors such as security,ease of impleme
177、ntation,and interoperability with existing systems directly impact the number of participants and their willingness to engage with the e-HKD platform.Based on the pilot experiences,we have identified three key enablers which are particularly vital for private sector companies interested in serving a
178、s intermediaries or e-HKD service providers:1.API and sandbox environmentAPIs foster innovation by providing developers with easy access to e-HKD services,enabling them to build novel use cases.With a standardised interface for communication and controlled access,APIs play a crucial role in ensuring
179、 the security and flexible integration between the e-HKD platform and private sector infrastructure.Additionally,the sandbox environment serves as a vital testing environment for intermediaries to simulate use cases and continue innovating for e-HKD.2.Interoperability standardsTo ensure an open-loop
180、 system for e-HKD,the establishment of interoperability standards would be the key,such as message protocols,security protocols,and data standards.These standards enable seamless integration between different intermediaries and could potentially save the cost and effort of system development or conn
181、ection in later stage.By adhering to interoperability standards,private sector participants can build on a common infrastructure while maintaining compatibility with other payment platforms.This promotes collaboration and facilitates the development of interconnected services,expanding the possibili
182、ties for end-users.3.Use of private blockchainsIn the pilot,Hang Seng e-wallet utilised DLT as the infrastructure,specifically employing a private blockchain.However,it should be noted that the use of DLT is not necessarily required to achieve programmability and the decision to use DLT or non-DLT t
183、echnologies for e-HKD has not been finalised by the HKMA.Solely based on the pilot experience,if DLT and blockchain is used,a private blockchain is deemed more favourable than a public blockchain.Public blockchains provide widespread adoption and a global infrastructure for peer-to-peer transactions
184、,fostering innovation and ecosystem development.However,public blockchains face challenges in terms of accountability and governance due to their decentralised nature.Additionally,the absence of a well-defined service level agreement in public blockchains makes it difficult to ensure consistent perf
185、ormance and reliability.This lack of predefined expectations may not be suitable for a financial market infrastructure where clear service standards are essential for establishing trust and stability.Oliver Wyman29Envisioning Programmable Payments In Hong KongFrom the pilot,private blockchain networ
186、ks appear to be a more suitable solution for the programmable e-HKD use cases.Private blockchains provide enhanced accountability and governance by explicitly defining the responsible entities for network operation.They also demonstrate superior scalability and performance compared to public blockch
187、ains.With smaller network sizes,private blockchains can process transactions faster,ensuring efficient performance even during high-demand periods.This reliability and predictability are vital for financial market infrastructure,where trust and stability are paramount.By leveraging these enablers,th
188、e e-HKD platform,if it launches,could attract a diverse range of participants,including private sector companies,intermediaries,and FinTech players.This will foster innovation,drive the creation of new use cases,and ultimately enhance the overall user experience within an e-HKD ecosystem.Oliver Wyma
189、n30Envisioning Programmable Payments In Hong Kong4 Whats next for stakeholders?The completion of Phase 1 of e-HKD Pilot Programme is not the end of the endeavour.Rather,it leads us to more systematic questions to be solved in the future.Looking forward to further exploratory studies,we would like to
190、 draw the markets attention to the following three areas:Explore the technical design of e-HKD infrastructure to optimise future opportunities and risk management:From the opportunity aspect,the design should consider encouraging innovation and maintaining healthy market competition.From risk manage
191、ment aspect,considerations around data privacy and cybersecurity should be rigorously laid out and assessed.Section 3 has set out several key components of the technical design,i.e.,participation models,programmability setup and ownership,and the innovation-friendliness of e-HKD platform.Define the
192、position of e-HKD in Hong Kongs monetary and financial systems:Apart from retail CBDCs,other forms of digital money are also emerging as potential solution to deliver the features of programmability,interoperability,etc.It requires careful consideration of potential digital money landscape in the fu
193、ture,i.e.,among different types of digital money,what would be the role of e-HKD?Whether it will be one of the digital money options for payment and innovation,or more to support the issuance of other digital money(e.g.tokenised deposits,stablecoins)due to its central bank backing?What roles would d
194、ifferent digital money play in Hong Kongs monetary and financial regulatory systems and how would they interoperate with conventional payment systems?Explore the feasibility of the programmable payment use cases in large scale:Despite the benefits identified in the Phase 1 Pilot,they are mostly subs
195、tantiated in small-scale use cases.Hence,to validate the use case benefits in real life,further design,analysis and testing should be conducted.Meanwhile,the future study on e-HKD use cases presents a valuable opportunity to reassess businesses long-established norms and processes,and address their
196、non-technical inefficiencies related to payments.Oliver Wyman31Envisioning Programmable Payments In Hong KongExhibit 8:Example questions to explore the feasibility of the programmable payment use cases in large scalePurposeUSE CASE 1Government grant disbursementUSE CASE 2Merchant reward programmeTo
197、ensure user desirability for future adoptionGovernment organisations What additional functionalities should be embedded in the solution in order to create a better user experience(e.g.,seamless integration with government workflow)?If e-HKD system/application could be connected to the government sys
198、tem,how to ensure a secure integration to control cybersecurity risks?Beneficiaries(recipient of the subsidies)How to design an intuitive and streamlined customer journey for individual beneficiaries to receive subsidies?Do they need to download new applications or could receive the subsidy through
199、existing applications?If subsidy usage is to be tracked,who could monitor the usage and how to ensure data privacy?Merchants How to best integrate with merchant systems(e.g.,point of sales,customer relationship management systems)for easy reward programme management?What reward programme programmabi
200、lity would be desired by both large and small retailers,given some merchants may already have their own loyalty programmes?What value-added services should be enabled in the solution in order to create a better user experience?(e.g.,ability to view customer data and run some analytics)Individual use
201、rs(customers)What incentives would be viable to the individual users to adopt e-HKD?Who should provide the incentives to drive adoption?To assess the feasibility of large-scale implementation How to ensure a scalable system design to cater for the throughput of large-scale government grant disbursem
202、ent?How to ensure inclusion which all beneficiaries could receive the funds given some may be less tech-savvy?How to ensure a scalable system design to cater for the large throughput and diversified types of rewards being facilitated?Oliver Wyman32Envisioning Programmable Payments In Hong KongIn con
203、clusion,we have seen the potential of an e-HKD to revolutionise the retail payment landscape in Hong Kong by its uniquely combined features in programmability,traceability and interoperability.Leveraging these features,Hong Kong can empower its citizens and businesses with smarter,more seamless and
204、more cost-effective payment solutions,which may also serve as reference for other advanced economies exploring retail CBDCs.However,it is crucial for regulators and industry stakeholders to collaborate closely to further explore and validate the value of e-HKD in full-scale implementation.Through ri
205、gorous testing,validation,and ongoing dialogue,Hong Kong could become a global leader in the realm of retail CBDCs,fostering a vibrant and inclusive digital economy for the benefit of all.Oliver Wyman33Envisioning Programmable Payments In Hong KongHANG SENG BANKGilbert LeeHead of Strategy&Planning a
206、nd Chief of Staff to Chief ExecutiveKim LayHead of Digital BankingJohn WongHead of Global Payments SolutionsNike KongHead of InnovationNancy ChengPrincipal,Strategic Planning and Corporate DevelopmentConnie DiuSenior Strategist and Senior Corporate Development ManagerFor inquiries,please contact:OLI
207、VER WYMANRonald FungPartner,Financial Services,Digital Michael HoPartner,Financial ServicesJasper YipPartner,Financial ServicesCrystal DongPrincipal,Financial ServicesChantel TseConsultantAdeline MakConsultantFor inquiries,please contact:AUTHORSSPECIAL THANKS TOFORMS Syntron Information(HK)Ltd.is a
208、cross-border FinTech Thought Leader,Incubator,Enabler,as well as the international arm of FORMS SYNTRON(300468.SZ)serving financial institutions in Hong Kong,Thailand and overseas.FORMS is a pioneering cross-border FinTech firm that offers advisory and implementation service for established banks,vi
209、rtual banks and central banks.For more information,visit https:/forms-Copyright 2023 Oliver Wyman and Hang Seng Bank Ltd.All rights reserved.Disclaimer from Oliver Wyman and Hang Seng Bank Ltd.This report may not be reproduced or redistributed,in whole or in part,without the written permission of Ol
210、iver Wyman(“OW”)and Hang Seng Bank Ltd.(“Hang Seng”).OW and Hang Seng accept no liability whatsoever for the actions of third parties in this respect.The information and opinions in this report were prepared by OW and Hang Seng.This report is not investment advice and should not be relied on for suc
211、h advice or as a substitute for consultation with professional accountants,tax,legal or financial advisors.OW and Hang Seng have made every effort to use reliable,up-to-date and comprehensive information and analysis,but all information is provided without warranty of any kind,express or implied.OW
212、and Hang Seng disclaim any responsibility to update the information or conclusions in this report.OW and Hang Seng accept no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to
213、 herein,or for any consequential,special or similar damages even if advised of the possibility of such damages.This report may not be used,distributed or sold without the written consent of OW and Hang Seng.Disclaimer from the Hong Kong Monetary AuthorityThe Hong Kong Monetary Authority(HKMA)acknowl
214、edges Hang Seng and OW as the co-authors of this white paper.No statement,representation or warranty of any kind is given by the HKMA,whether express or implied.Any positions or statements made in this white paper do not necessarily represent the views of the HKMA.Oliver Wyman A business of Marsh McLennan